How would Sensible Tax Reform affect exports and imports?
One of the strongest arguments in favor of discarding our current federal tax systems in favor of STR is Americas dreadful international economic performance. We export much less than an economy of our size is capable of doing; China and Germany, both much smaller economies, export much more than we do. Even worse is our massive amount of imports. We import $700 billion more goods every year than we export–almost $2 billion each and every day. That is lost economic growth. It also means the loss of hundreds of thousands of jobs. And to pay that huge excess-import bill (each and every year), American companies and the U.S. Government need to borrow most of the needed funds abroad. Today, when American companies sell, they have already embedded in their prices more than $1 trillion of annual tax-related costs. Those costs are, of course, passed on to their customers in the form of higher prices. Under Sensible Tax Reform, those tax expenses will be lifted from companies. They will have
