Trump on border adjustments
In his interview with Axios, the president-elect walked back comments from an earlier chat with the Wall Street Journal in which he said he thought a tax reform strategy called "border adjustment" was "too complicated."
Trump said that the Journal's piece "didn't totally reflect [his views] accurately." He told Axios the idea is "certainly something that is going to be discussed" in negotiations with Congressional Republicans over their forthcoming corporate tax reform plan.
What is border adjustment? A tax policy that penalizes companies that import products from abroad and benefits ones that keep production in the United States. The change will be fought tooth and nail by retailers and other firms with large import expenses, but it will raise significant revenue, allow a big headline corporate tax cut, and adjust the tax code to support U.S. employment.
Why the change of tune? Paul Ryan publicly defended border adjustment through a spokesperson on Tuesday — evidence that this is an issue that Republicans on the Hill will go to bat for. The reason is simple arithmetic. Border adjustment is estimated to raise roughly $1 trillion in new revenue, helping to pay for the bulk of the House reform plan, and it also can be sold as worker and export friendly — two must-haves for Trump's base.