4 ms·

This is an interesting concept, and worthy of including in the discussion, but you are presenting Border Adjustment Tax as if the results are a certainty. The

by zizee 5y ago

This is an interesting concept, and worthy of including in the discussion, but you are presenting Border Adjustment Tax as if the results are a certainty. The Wikipedia article describes this as theoretical with quite a bit of uncertainty, and economists are far from concensus on what the outcomes would be. There are also definitely winners and losers in this system, so it's not so simple to say it the proposal was killed just because some big companies were against it.

throwaway34241 5y ago
Do you have any resources for how in-dispute the (eventual) currency adjustment part is? As you probably know, there is never 100% agreement among economists on anything, and no matter how narrow the opposition is you can often count on politically-motivated groups to find and promote it relentlessly. The main data I have is both Mankiw and Krugman (both highly eminent economists from different sides of the aisle) seemed to think it checked out (and the idea is over 20 years old at this point, so it's not that new). Krugman in particular got his Nobel on trade and, uh, is not normally inclined to say nice things about Republicans (this was proposed in the US as part of a Republican tax reform initiative). So that's enough for me to presume that the math is probably OK, although I admit I'm not capable of checking it myself, and it would be nice if a more comprehensive survey was available. If the currency adjustment does balance out I'm not sure who the (eventual) losers would be aside from internationals that profit-shift to low tax jurisdictions (which was the whole point). Of course if the currency adjustment wasn't immediate you could see winners/losers for some period. I'm sure there would be other transition costs, the tax system is already pretty complex and thinking about all the edge cases while switching between two completely different tax regimes seemed rather headache-inducing.
- zizee 5y ago
  My comment was not arguing one way or another. Instead I was pointing out that the original wording of your top level comment might mislead people as it sounded like there was little doubt to the effectiveness of a Border Adjustment Tax, when in truth it has never been tried. Rereading your original post it now seems more reasonable. I don't know if that is because it has been edited, or because I am reading it in a new light. To be clear, I welcome the suggestion of trying new solutions. The current system is clearly broken.
  - throwaway34241 5y ago
    NP, FWIW I didn't make any edits that should change the tone (although I think I did make one trivial change in the first 60 seconds or so before any replies).
    - zizee 5y ago
      All good mate. Enjoy your weekend.
trompetenaccoun 5y ago
You mean theoretical and uncertain like the experiment they're doing on a global scale now? When did we ever have 130 nations all agree on the same corporate tax rate? Not that I think it's necessarily bad, it's probably better than the current system which is very broken. But can you explain how and why that is actually a better idea than introducing a BAT system? Again, both are theoretical and have never been tried, so you should have very good research to back up a claim that the global flat rate tax is the better idea.
- zizee 5y ago
  > But can you explain how and why that is actually a better idea... > ...so you should have very good research to back up a claim that the global flat rate tax is the better idea. Should I presume the "you" in these sentences is me? Or is it some hypothetical future person making such claims? If you did mean me, I don't understand what part of what I wrote was me making any claims of superiority of one system over the other? My comment was pointing out that the grandparents comments should not be written so definitively, where much doubt exists.
  - trompetenaccoun 5y ago
    Yes, I understand your comment perfectly and just tried to explain it's not a rational argument in this case. BAT has never been tried, same as the global minimum tax. The situation is we have a tax system that's broken. Apart from the multinational corporations practically everyone agrees on this part. Now we have to find a way to fix it in an ever more globalized world, a situation which we never had to deal with and for which there is no proven solution for that reason. Whatever we do will be untested. The question is which is the better idea and why?
    - zizee 5y ago
      > I understand your comment perfectly and just tried to explain it's not a rational argument in this case. I don't know how you can say you understand my comment perfectly when you then tell me my "argument" is not rational. I am not making any "argument" about different tax systems. My original comment was a metacomment about the original comment being too strongly worded. I agree with you that the current situation is broken, and a fresh look is required to solve it.

by zizee 5y ago

throwaway34241 5y ago

Do you have any resources for how in-dispute the (eventual) currency adjustment part is? As you probably know, there is never 100% agreement among economists on anything, and no matter how narrow the opposition is you can often count on politically-motivated groups to find and promote it relentlessly. The main data I have is both Mankiw and Krugman (both highly eminent economists from different sides of the aisle) seemed to think it checked out (and the idea is over 20 years old at this point, so it's not that new). Krugman in particular got his Nobel on trade and, uh, is not normally inclined to say nice things about Republicans (this was proposed in the US as part of a Republican tax reform initiative). So that's enough for me to presume that the math is probably OK, although I admit I'm not capable of checking it myself, and it would be nice if a more comprehensive survey was available. If the currency adjustment does balance out I'm not sure who the (eventual) losers would be aside from internationals that profit-shift to low tax jurisdictions (which was the whole point). Of course if the currency adjustment wasn't immediate you could see winners/losers for some period. I'm sure there would be other transition costs, the tax system is already pretty complex and thinking about all the edge cases while switching between two completely different tax regimes seemed rather headache-inducing.

zizee 5y ago
My comment was not arguing one way or another. Instead I was pointing out that the original wording of your top level comment might mislead people as it sounded like there was little doubt to the effectiveness of a Border Adjustment Tax, when in truth it has never been tried. Rereading your original post it now seems more reasonable. I don't know if that is because it has been edited, or because I am reading it in a new light. To be clear, I welcome the suggestion of trying new solutions. The current system is clearly broken.
- throwaway34241 5y ago
  NP, FWIW I didn't make any edits that should change the tone (although I think I did make one trivial change in the first 60 seconds or so before any replies).
  - zizee 5y ago
    All good mate. Enjoy your weekend.

trompetenaccoun 5y ago

You mean theoretical and uncertain like the experiment they're doing on a global scale now? When did we ever have 130 nations all agree on the same corporate tax rate? Not that I think it's necessarily bad, it's probably better than the current system which is very broken. But can you explain how and why that is actually a better idea than introducing a BAT system? Again, both are theoretical and have never been tried, so you should have very good research to back up a claim that the global flat rate tax is the better idea.

zizee 5y ago
> But can you explain how and why that is actually a better idea... > ...so you should have very good research to back up a claim that the global flat rate tax is the better idea. Should I presume the "you" in these sentences is me? Or is it some hypothetical future person making such claims? If you did mean me, I don't understand what part of what I wrote was me making any claims of superiority of one system over the other? My comment was pointing out that the grandparents comments should not be written so definitively, where much doubt exists.
- trompetenaccoun 5y ago
  Yes, I understand your comment perfectly and just tried to explain it's not a rational argument in this case. BAT has never been tried, same as the global minimum tax. The situation is we have a tax system that's broken. Apart from the multinational corporations practically everyone agrees on this part. Now we have to find a way to fix it in an ever more globalized world, a situation which we never had to deal with and for which there is no proven solution for that reason. Whatever we do will be untested. The question is which is the better idea and why?
  - zizee 5y ago
    > I understand your comment perfectly and just tried to explain it's not a rational argument in this case. I don't know how you can say you understand my comment perfectly when you then tell me my "argument" is not rational. I am not making any "argument" about different tax systems. My original comment was a metacomment about the original comment being too strongly worded. I agree with you that the current situation is broken, and a fresh look is required to solve it.