Can a New Border Tax Protect America's Place In the World?

The Wall Street Journal outlines President Trump’s plan for reducing the trade deficit and boldly slashing income tax rates:

The Trump administration took a step toward a House Republican tax plan Thursday when it tentatively endorsed a proposal to tax U.S. imports and exempt exports from taxation, an idea known as “border adjustment.”

House Republicans are banking on the idea to help pay for deep cuts in corporate and individual income-tax rates.

“This president is looking at a very bold tax reform approach,” Rep. Kevin Brady (R., Texas) told Fox News. “Our competitors are already doing this.”

A border adjustment is different from the “big border tax” that Mr. Trump often talks about and has described as a targeted 35% levy on firms that outsource production and bring goods back into the U.S.

In the short run, border adjustment would raise money for the government—about $1 trillion over a decade. That’s because the U.S. imports more than it exports, running an annual trade deficit in excess of $500 billion.