Donald Marron

So: No, the border-adjusted cash flow tax can’t make Mexico pay for the wall 8/

We have trade deficits with many countries. There is nothing Mexico specific about the border-adjusted cash flow tax 7/

And it invites some obvious questions: What is China paying for? Japan? Germany? Vietnam? 6/

Sure, you can say that. But that means those revenues aren’t paying for things the government already does 5/

But can’t we just say net revenues from Mexican trade pay for the wall? 4/

You really can’t pay for anything if tax reform ends up reducing revenue 3/

The border-adjusted cash flow tax is part of revenue-neutral tax reform. You can’t pay for anything with revenue-neutral tax reform 2/

Folks are asking whether the House’s border-adjusted cash flow tax can make Mexico “Pay for the Wall.” Answer: No 1/

If purpose is to "pay for the wall", what happens when the wall is built? Would tax exist in long run? 10/

As several folks have noted (thx), the burden on US firms would fall as we move from short run to long run. Which raises a question 9/

If he proposes taxing Mexican imports, Trump would be asking US consumers, US businesses, & Mexican producers to jointly pay for the wall. 8

I am seeing different interpretations of the idea floated today, so let me update 7/

By taxing imports, President Trump is asking US consumers, US businesses, and Mexican producers to jointly pay for the wall. 6/

But Mexican producers would raise prices. US paychecks won’t go as far, and myriad US businesses will face higher costs 5/

Taxing imports would generate some revenue from Mexican producers that can’t raise prices enough to offset tax but keep selling 4/

Maybe President Trump can come up with a tax / tariff that makes Mexico pay indirectly? 3/

Mexico understandably refuses to write the check directly, but that’s not enough 2/

“Paying for the Wall” is a remarkable case study for illustrating tax incidence 1/