2017-10-06 04:43:37 UTC
Trump said Mexico would pay for the wall.They will.
Yes, Trump can make Mexico pay for the border wall. Here's how.
Here's what President-elect Donald Trump has been doing since the election
He has been holding interviews and meetings as he prepares to transition
into the White House.
By Marc A. Thiessen January 17
Mexican President Enrique Peña Nieto told an assembly of top diplomats
last week that "Mexico of course will not pay" for Donald Trump's wall.
His predecessor, former president Vicente Fox, put it more bluntly in a
tweet storm last week, declaring: "TRUMP, when will you understand that I
am not paying for that [f----n] wall."
They are both wrong. Trump absolutely can make Mexico pay. And the answer
lies in a provision of the corporate tax-reform plan House Republicans are
planning to take up after Trump's inauguration - the so-called "border
The House Republicans' plan would lower the corporate tax from 35 percent
to 20 percent and apply the tax based on the location of consumption
rather than the location of production. It would do this through a "border
adjustment" that exempts exports while taxing imports. Under the plan, all
imports coming into the United States would be subject to the 20 percent
tax, but exports would have the tax refunded - making them tax-free.
Supporters see it as a way for Trump to follow through on his campaign
pledge to tax imports and support exports without resorting to tariffs
that would provoke a massive global trade fight. Right now, more than 160
countries around the world have a "border adjusted" value-added tax (VAT).
So unlike tariffs, a border adjustment should be able to pass muster with
the World Trade Organization.
President Trump has repeatedly asserted that "Mexico will pay" for his
proposed southern border wall - but he's also said the U.S. will be
reimbursed by Mexico after building it with taxpayer funds. (Peter
Stevenson/The Washington Post)
Here is where the wall comes in: As economist Martin Feldstein explains,
the border adjustment would raise hundreds of billions in tax revenue -
not from U.S. consumers or corporations, but from our foreign trading
partners. Under the border adjustment, the United States would refund the
tax on exports and charge it on imports - so the net revenue would be
negative if we had a trade surplus, and positive if we had a trade
deficit. Because the United States has a trade deficit, Feldstein
calculates the border adjustment would bring in about $120 billion a year,
or $1 trillion over a decade.
One of the countries with whom we have a large trade deficit is .?.?.
Mexico. The U.S. trade deficit in goods with Mexico was $60.7 billion in
2015 and is expected to be around $65 billion in 2016. So if Mexican
imports are taxed at a rate of 20 percent, the United States would raise
about $13 billion a year in revenue from Mexico via the border adjustment.
How much will the wall cost? Trump has put the price at between $8 billion
and $12 billion. Others have suggested it could be higher, between $15
billion and $25 billion. Either way, the full cost would be more than
covered in one or two years by the $13 billion in annual revenues we would
collect from Mexico. Indeed, over several years, the border adjustment
could force Mexico to pay not only for the wall, but for the costs of a
lot of Trump's other border-security measures - from expediting the
deportation of criminal aliens to hiring more screeners to conduct
In other words, the border adjustment would allow Trump to keep two major
campaign promises at once - he could tax imports and subsidize exports,
while forcing Mexico to pay for the wall.
And here is the really brilliant part: There is nothing Mexico could do
about it. Mexico might find ways to retaliate over specific measures
targeting it - such as increased fees for visas or taxing remittances. But
with the border adjustment, Mexico would have no recourse to complain,
because such a measure is global in nature and would affect all U.S.
trading partners equally. Plus, how could Mexico object when it is one of
the 160 countries around that world that has a "border adjusted" VAT of
So yes, thanks to the border adjustment, Donald Trump can indeed make
Mexico pay for the BLEEP-ing wall. And Mexico would be powerless to stop
STILL can't understand why liberal Democrats are so in love with Mexicans.
Mexicans are against abortion, contraception, pre-marital sex, mainly
because they're mostly Catholic... oh, and they HATE you. Am I leaving
anything else out that you just LOVE about them?
Riiiiight... they're potential Democrap voters.