Border Tax Adjustment

Border Tax Adjustment

A tax to which domestically produced goods and imports are subject but from which exports are exempt. Border tax adjustments are intended to encourage exports while not making imports excessively competitive against domestic goods. This may be seen as a barrier to trade.
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approach based on the four criteria set forth in Border Tax Adjustments,
132) Border tax adjustments would affect change by incentivizing non-carbon-taxing nations to become more environmentally responsible and help current carbon-taxing nations establish an equal footing in the global market.
See infra Part IV (analyzing border tax adjustments and benefits of promoting renewable energy).
See infra Part V (asserting need for border tax adjustments on exports produced in inefficient energy facilities).
Border tax adjustments have long been proposed in conjunction with
Border tax adjustments are not in and of themselves impermissible
definition of border tax adjustments used by the Organisation for
On the other hand, border tax adjustment policies that applied an equal carbon price to both foreign and domestic firms and did not discriminate by country might be WTO compliant and practical to implement if their calculation were based solely on Canadian or internationally consistent emissions data (Ismer and Neuhoff 2004).
The study explores several mechanisms, such as border tax adjustments, that could be used to mitigate these effects, and finds that while such measures can be successful at reducing competitiveness impacts, such protection is likely costly to both the wider economy and the environment, and ill prepare Canada for a long-term future with significant carbon pricing.
2) Is policy to alleviate the effects on competitiveness, such as border tax adjustments or exemptions from cap-and-trade limits, warranted and in what situations?
It may be possible to achieve indirect tax status and border tax adjustments, without adopting a multi-stage sales tax.
Despite the obvious advantages of border tax adjustments and the philosophical desire to shift the tax burden away from savings and investment, when it gets down to reality, there are just as many negatives as positives.