Border-Adjustment Tax Eliminated from Tax Reform Plan

By Mark R. Baran  |  August 14, 2017

While much of the Trump administration’s tax reform plan remains uncertain, we now know one thing for sure: it will not include a border-adjustment tax. The GOP-led effort has been officially abandoned by Paul Ryan and other House members who originally proposed the “destination-based” tax last year.

As outlined during Marks Paneth’s International Corporate Tax joint seminar with EACCNY last spring, the border adjustment plan would tax imports and exempt exports, with the two-fold goal of raising an estimated $1 trillion dollars and encouraging companies to keep their manufacturing in the United States. The move was also intended to offset the deficit caused by the reduction of corporate tax rates in the Trump administration’s tax reform proposal.

The border adjustment tax was controversial from the start, with opponents from the government and commercial sector expressing concerns over the costs being passed on to American consumers.

What this means for you

The announcement is welcome news for big retailers, manufacturers and other businesses that import products from overseas. However, we have no indication of how the House plans to replace the revenue-generating potential of the border adjustment tax, nor the new strategy it will incorporate to deter the common practice of offshoring. Marks Paneth will keep you informed as more details of the tax reform plan are announced.

Please contact Mark Baran, Principal in the Marks Paneth Tax Advisory Group, at for more information.


About Mark R. Baran

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Mark Baran, JD LL.M., is a Principal in the Tax Department at Marks Paneth LLP. He has more than 25 years of specialized tax, transactional and legal experience advising publicly-traded and private companies, regulated financial institutions, investors, high net worth individuals, and government agencies. Mr. Baran provides specialized tax consulting and transactional services to a broad spectrum of clients and industries including the public sector. He routinely provides tax opinions on the tax implications of... READ MORE +

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