Touch the Soil News #613
In any tax scheme, there are winners and losers. Hitting the financial news of late are the debates over the proposed Border Adjustment Tax. This is different than the Trump border tax.
The Border Adjustment Tax stems from Republican lawmakers wanting to revamp the corporate tax code. The idea is to lower corporate taxes, while increasing taxes on imports. Since much of the goods American consumers buy are imports, criticisms are that it is little more than a hidden sales tax. As such, over 100 businesses and trade organizations have stepped up to oppose it. Joining the opposition is William C. Dudley, President and CEO of the New York Federal Reserve.
The National Retail Federation warns that there could be material consequences to the cost of food, gas and clothing. According to the NRF, if enacted, the Border Adjustment Tax could cost American households as much as $1,700 a year.
Estimates are that the Border Adjustment Tax will hurt the lower income folks the most.
Particularly vocal in opposition to raising import taxes is the National Grocers Association. The Association reports that 30 to 40 percent of fresh produce items sold in stores are imported into the United States. The USDA forecasts agricultural imports into the United States for 2017 to be $112.5 billion. A 20 percent tax on $112,500 is $22.5 billion. Much of that food is imported because it can’t be grown here due to climate limitations.
Things are happening so fast that it is confusing to understand things before they become law. Wish we had some answers and recommendations. Our only recommendation is that getting grounded in raising food and having food growing skills is not such a bad idea.
Following is a video clip attempting to explain the Border Adjustment Tax: