Publications: Notes at the Margin

The Border Adjustment Tax: Really a Tax on Imported Oil (March 6, 2017)


The border adjustment tax (BAT) proposed by House Speaker Paul Ryan and House Ways and Means Committee chairman Kevin Brady is really a tax on imported oil dressed in drag. Comparing our BAT revenue estimates to those of the Tax Foundation and the Brookings Institution's Tax Policy Center, we find that oil imports would generate between fifty and sixty-five percent of the total. Based on the diverse nature of the economy and the relative importance of oil to GDP, we suggest that oil importers would bear a disproportionate share of the tax burden. This report discusses the details of this and the implications.


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