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Thread: Republicanís destination based cash flow tax, (DCBCFT)?

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    Republicanís destination based cash flow tax, (DCBCFT)?

    Republican’s destination based cashflow tax, (DBCFT)?

    I’ve read of the proposed destination based cash flowtax, (i.e. DBCFT) to replace corporate income tax.
    http://www.csmonitor.com/Business/Tax-VOX/2017/0111/Here-is-the-scoop-on-corporate-tax-reform-proposals-from-House-Republicans

    I’m familiar with consumption taxes and income taxes, but the concept of DBCFT is much less clear to me. I can’t consider what I don’t understand.
    This explanation published by the Christian Science Monitor, (a good reputable newspaper), is inadequate.

    Excerpted from
    http://www.csmonitor.com/Business/Tax-VOX/2017/0111/Here-is-the-scoop-on-corporate-tax-reform-proposals-from-House-Republicans :

    “(2) The DBCFT is essentially a value-added tax (VAT), but with a deduction for wages. Every advanced country except theU.S. has a VAT alongside a corporate income tax. The U.S. would in effect be replacing the corporate income tax with a modified VAT. A VAT taxesconsumption, not income – it has the same effects as a national retail salestax, but works better administratively”.

    Double dipping?Enterprises operating within the USA deduct their normal domestic expenditures for labor costs (from what if corporate income taxes are repealed)?

    How would the USA enforce a tax upon money paid to recipients beyond our borders? Isn’t that particularly difficult when the money is passed among globally operating single enterprises, or enterprises associated with each other such as subsidiary enterprises or otherwise independent enterprises that are associated by innumerable manners of other agreements?

    What I’ve read thus far implies a proposal that’s only applicable to USA’s international transactions; I consider that to be less rather than more feasible than USA adopting a general value added tax, (i.e. VAT).

    Respectfully, Supposn
    Last edited by Supposn; 15th January 2017 at 08:51 AM.

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    Quote Originally Posted by Supposn View Post
    Republican’s destination based cashflow tax, (DCBCFT)?

    I’ve read of the proposed destination based cash flowtax, (i.e. DBCFT) to replace corporate income tax.
    http://www.csmonitor.com/Business/Tax-VOX/2017/0111/Here-is-the-scoop-on-corporate-tax-reform-proposals-from-House-Republicans

    I’m familiar with consumption taxes and income taxes, but the concept of DBCFT is much less clear to me. I can’t consider what I don’t understand.
    This explanation published by the Christian Science Monitor, (a good reputable newspaper), is inadequate.

    Excerpted from
    http://www.csmonitor.com/Business/Tax-VOX/2017/0111/Here-is-the-scoop-on-corporate-tax-reform-proposals-from-House-Republicans :

    “(2) The DBCFT is essentially a value-added tax (VAT), but with a deduction for wages. Every advanced country except theU.S. has a VAT alongside a corporate income tax. The U.S. would in effect be replacing the corporate income tax with a modified VAT. A VAT taxesconsumption, not income – it has the same effects as a national retail salestax, but works better administratively”.

    Double dipping?Enterprises operating within the USA deduct their normal domestic expenditures for labor costs (from what if corporate income taxes are repealed)?

    How would the USA enforce a tax upon money paid to recipients beyond our borders? Isn’t that particularly difficult when the money is passed among globally operating single enterprises, or enterprises associated with each other such as subsidiary enterprises or otherwise independent enterprises that are associated by innumerable manners of other agreements?

    What I’ve read thus far implies a proposal that’s only applicable to USA’s international transactions; I consider that to be less rather than more feasible than USA adopting a general value added tax, (i.e. VAT).

    Respectfully, Supposn
    sounds like a bunch of regulations which can be confusing, to me. also difficult to assess without more information than the articles have. my experience with such regulations which are complex and confusing is that they are difficult to enforce. simpler is better.

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    Quote Originally Posted by Supposn View Post
    Republican’s destination based cashflow tax, (DBCFT)?

    I’ve read of the proposed destination based cash flowtax, (i.e. DBCFT) to replace corporate income tax.
    http://www.csmonitor.com/Business/Tax-VOX/2017/0111/Here-is-the-scoop-on-corporate-tax-reform-proposals-from-House-Republicans

    I’m familiar with consumption taxes and income taxes, but the concept of DBCFT is much less clear to me. I can’t consider what I don’t understand.
    This explanation published by the Christian Science Monitor, (a good reputable newspaper), is inadequate.

    Excerpted from
    http://www.csmonitor.com/Business/Tax-VOX/2017/0111/Here-is-the-scoop-on-corporate-tax-reform-proposals-from-House-Republicans :

    “(2) The DBCFT is essentially a value-added tax (VAT), but with a deduction for wages. Every advanced country except theU.S. has a VAT alongside a corporate income tax. The U.S. would in effect be replacing the corporate income tax with a modified VAT. A VAT taxesconsumption, not income – it has the same effects as a national retail salestax, but works better administratively”.

    Double dipping?Enterprises operating within the USA deduct their normal domestic expenditures for labor costs (from what if corporate income taxes are repealed)?

    How would the USA enforce a tax upon money paid to recipients beyond our borders? Isn’t that particularly difficult when the money is passed among globally operating single enterprises, or enterprises associated with each other such as subsidiary enterprises or otherwise independent enterprises that are associated by innumerable manners of other agreements?

    What I’ve read thus far implies a proposal that’s only applicable to USA’s international transactions; I consider that to be less rather than more feasible than USA adopting a general value added tax, (i.e. VAT).

    Respectfully, Supposn
    The term I hear bantered around more frequently is border adjustability tax. For purposes of simplicity, bring it ti its simplest components. In essence it is a territorial tax where domestic revenue can be deducted by domestic costs. In essence you disfavor imports as inputs and favor exports as outputs.

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    Quote Originally Posted by bonehead View Post
    sounds like a bunch of regulations which can be confusing, to me. also difficult to assess without more information than the articles have. my experience with such regulations which are complex and confusing is that they are difficult to enforce. simpler is better.
    It patently violates WTO rules. I currently don't believe it has any chance.

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    Quote Originally Posted by publius3 View Post
    It [i.e. the Republican's DBCFT proposal] patently violates WTO rules. I currently don't believe it has any chance.
    Publius, USA trade agreements such as those with the WTO and the NATA are not treaties approved by a 2/3 vote of the U.S. Senate. Only a tenth of our government's international agreements and none of our trade agreements have the constitutional status of “treaties”.

    All USA’s trade agreements, (executive agreements enacted without congressional consent, and congressional-executive or other agreements passed with their consent) are later subject to mutually agreed modifications among the participating nations. The White house has supreme USA negotiating jurisdiction.
    If agreement participants cannot reach agreement regarding modifications, there’s explicit provisions for participants at any time granting six months’ notice of their intention to withdraw from the agreement.

    Respectfully, Supposn
    Last edited by Supposn; 18th January 2017 at 06:21 AM.

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    Quote Originally Posted by Supposn View Post
    Publius, USA trade agreements such as those with the WTO and the NATA are not treaties approved by a 2/3 vote of the U.S. Senate. Only a tenth of our government's international agreements and none of our trade agreements have the constitutional status of “treaties”.

    All USA’s trade agreements, (executive agreements enacted without congressional consent, and congressional-executive or other agreements passed with their consent) are later subject to mutually agreed modifications among the participating nations. The White house has supreme USA negotiating jurisdiction.
    If agreement participants cannot reach agreement regarding modifications, there’s explicit provisions for participants granting six months’ notice of their intention to withdraw from the agreement.

    Respectfully, Supposn
    It wouldn't matter if its a treaty or not. A subsequently passed statute would take precedence over a treaty ANYWAY (a treaty has no more force in law than that of a statute). NAFTA is law and actually passed by the House because the treaty, senatorial approval, wouldn't be enough to lower the tariffs. Nothing prevents Congress from unilaterally imposing tariffs or passing any law which would violate WTO. However, when other countries bring their trade disoutes before WTO, they will rule that border adjustability will violate it and the result will be that the WTO will permit the complaining country to impose a countervailing measure. And then we can either keep it or be in a trade war.

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    Quote Originally Posted by publius3 View Post
    It wouldn't matter if its a treaty or not. A subsequently passed statute would take precedence over a treaty ANYWAY (a treaty has no more force in law than that of a statute). NAFTA is law and actually passed by the House because the treaty, senatorial approval, wouldn't be enough to lower the tariffs. Nothing prevents Congress from unilaterally imposing tariffs or passing any law which would violate WTO. However, when other countries bring their trade disoutes before WTO, they will rule that border adjustability will violate it and the result will be that the WTO will permit the complaining country to impose a countervailing measure. And then we can either keep it or be in a trade war.
    Publius3, no; treaties have equal legal status to anything else within the United State’s constitution. Only the U.S. Supreme Court or an amendment to the U.S. Constitution can trump whatever the USA agreed to within a “treaty”.

    I’m among the proponents for USA adopting the unilateral policydescribed within Wikipedia’s “Import Certificates” article. Regardless of other nations’ reactions, it will remain to USA’s better economic and social net advantage.

    Respectfully, Supposn
    Last edited by Supposn; 18th January 2017 at 07:20 AM.

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    Trade? We don't need no stinking trade!

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    Quote Originally Posted by Supposn View Post
    Publius3, no; treaties have equal legal status to anything else within the United State’s constitution. Only the U.S. Supreme Court or an amendment to the U.S. Constitution can trump whatever the USA agreed to within a “treaty”.

    Respectfully, Supposn
    You're wrong.

    It should be intuitively obvious. If a treaty has same force as a constitutional provision, the Senate and President, could, by treaty, amend the Constitution.

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    Originally Posted by Supposn: Publius, USA trade agreements such as those with the WTO and the NATA are not treaties approved by a 2/3 vote of the U.S. Senate. Only a tenth of our government's international agreements and none of our trade agreements have the constitutional status of “treaties”.

    All USA’s trade agreements, (executive agreements enacted without congressional consent, and congressional-executive or other agreements passed with their consent) are later subject to mutually agreed modifications among the participating nations. The White house has supreme USA negotiating jurisdiction.
    If agreement participants cannot reach agreement regarding modifications, there’s explicit provisions for participants granting six months’ notice of their intention to withdraw from the agreement.
    Respectfully, Supposn
    /////////////////////////

    Publius3, the first two sentences of 10:23 AM, 18Jan2017 of your response was. “It wouldn't matter if its a treaty or not. A subsequently passed statute would take precedence over a treaty ANYWAY (a treaty has no more force in law than that of a statute)”.
    I immediately posted this correction to your response:
    . Publius3, no; treaties have equal legal status to anything else within the United State’s constitution. Only the U.S. Supreme Court or an amendment to the U.S. Constitution can trump whatever the USA agreed to within a “treaty”.

    Quote Originally Posted by publius3 View Post
    You're wrong.
    It should be intuitively obvious. If a treaty has same force as a constitutional provision, the Senate and President, could, by treaty, amend the Constitution.
    My posts are correct. Provisions within a U.S. treaty are illegal if the U.S. Supreme Court deems them to be unconstitutional; (i.e. a treaty cannot amend the U.S. Constitution and a statute cannot amend a U.S. treaty).

    Respectfully, Supposn
    Last edited by Supposn; 19th January 2017 at 12:49 AM.

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