Retailers such as Target and Walmart and other companies that rely on imported goods and materials in their supply chain have suggested that a border tax adjustment
could increase their costs to the point of eroding profit margins.
CLC proposes a border tax adjustment
, with fees imposed on imports from nations "without comparable carbon pricing systems," and with rebates to exporters for sales into nations without such policies.
There are further problems with this proposal: how should such a border tax adjustment
system work in practice and how should the customs administration determine the individual tariffs for a wide variety of carbon-intensive products?
(3.) See infra Part IV (analyzing border tax adjustments
and benefits of promoting renewable energy).
WHY BORDER TAX ADJUSTMENTS
ARE PROPOSED IN CONJUNCTION WITH
Corollary 1: To be WTO-consistent, a border tax adjustment
cannot be based on the level of carbon embodied in the foreign produced final good, implying that [t.sup.b] [menor que o igual a] [g.sup.e], even if foreign production of the final good is more carbon-intensive f'([x.sup.U.sub.2]) > f'([x.sup.U.sub.1]).
TABLE 4 Energy Sector and All-Economy Impacts under Alternative Carbon Mitigation Price Signal Only Global Domestic Trading Market reforms No No Tax shifts No No Contribution from trading None Unlimited Sinks None Full Border tax adjustments
, fossil Yes Yes fuels Border tax adjustments
, other No No industries Domestic carbon price, $/tC 230 33 International carbon price, $/tC 33 Economic efficiency of climate policy GDP impact rel.
It is generally accepted that taxes directly levied on products are eligible for border tax adjustment
. Thus, GATT rules pose no serious obstacle to product-related environmental policies.
For example, border tax adjustments
, or BTAs is an important part of the changes trade policies, which imparts taxes on goods imported from countries and do not impose any rules or regulations to control emissions from various manufacturing companies.
"Border Tax Adjustments
: Do They Distort Trade?" Journal of International Economics 10, no.
It might have been because Canada is making some real progress on carbon pricing, or because Sudbury has been so successful in its regreening and mining supply sector, or because I've given a few talks for the Citizens' Climate Lobby on carbon taxes and border tax adjustments
This is accomplished via 100 percent exemption for dividends from foreign subsidiaries; a one-time repatriation tax of 8.75 percent for cash and 3.5 percent for everything else; and border tax adjustments
going forward whereby imported goods are subject to a tax (equal to the corporate tax rate of 20 percent) and revenues from exports are exempt.