Publications: Notes at the Margin

The Border Tax: An Impending Economic Catastrophe? (February 6, 2017)


The ignorance regarding the proposed border adjustment tax (BAT) should frighten everyone. The consequences for oil markets could be dire if traders and companies take or have already taken misguided actions in anticipation of the tax. Companies and producing countries will fall victim to the actions taken in anticipation of a tax policy change, actions that will almost certainly have dire financial impacts. Indeed, serious damage has already been done. Refiner profits could be devastated. OPEC’s efforts to stabilize crude oil prices will come to naught. Sadly, the advice being offered to companies by lawyers and consultants is probably wrong because these counselors have not done the hard work needed to understand the BAT.


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