Chad P. Bown is senior fellow at the Peterson Institute for International Economics.
President Donald Trump and his Republican allies in Congress are proposing major reforms to the US corporate tax system that would slash the corporate income tax rate and replace lost revenues with a new destination-based cash flow tax (DBCFT). The new tax would include a border tax adjustment that would subject US imports to the tax and exempt US exports. A third and critical element of the plan is a provision allowing US producers to deduct domestic wage costs in a manner not available to foreign companies. A major economic concern with the border tax adjustment blueprint, which House Speaker Paul Ryan and House Ways and Means Committee Chair Kevin Brady support, is its potential to reduce US imports and promote US exports in a way that could violate international trade rules. Because of the size of the US economy, the trade distortions resulting from the tax would punish US trading partners, putting pressure on them to retaliate immediately. World Trade Organization (WTO) rules establish a framework for understanding how the policy response of trading partners to a US tax reform would proceed. The potential retaliatory costs to US exporters associated with elements of the Ryan-Brady blueprint could be large. If the reform is found to violate WTO rules by restricting US imports, trading partners could be authorized to retaliate by an estimated $220 billion annually. If the new US tax is found to implicitly subsidize exports, partners could be authorized to retaliate by an additional $165 billion annually. The United States would face some of the combined $385 billion in retaliation almost immediately upon implementing the tax, through the imposition of countervailing duties (CVDs) by trading partners. Whereas a country like the United States might typically have four or more years before facing the prospect of WTO-related retaliation in other cases, the scenario here may be very different.
The expected costs of US failure to consider its WTO obligations are so large that policymakers must take them into account as they draft the tax reform. If they do not, trading partner recourse to WTO-sanctioned trade retaliation may quickly create the need for additional US efforts to re-reform the tax code. The uncertainty created could counteract many of the otherwise positive anticipated effects of tax reform for economic growth. Most of these costs are likely avoidable if US policymakers address them at the design stage of tax reform and engage with key trading partners. Strong legal and economic arguments can probably be made that a DBCFT with a (nondiscriminatory) border tax adjustment is WTOconsistent. If, however, US policymakers are unwilling to address international concerns before legislating changes, independent “scoring” efforts should take into account the expected costs to the US economy of authorizable trading partner retaliation.
Veja aqui o resto do excelente artigo de 10 páginas de Chad Bown no Peterson Institute for
International Economics PB17-11