Does the United States tax exports?

  • So the Trump administration has floated the idea of a 20% tariff on Mexican imports. Part of the Justification for this, was Sean Spicer's statement that (Emphasis mine)

    "Our country's policy is to tax exports and let imports flow freely in, which is ridiculous. But by doing it that way we can do $10 billion a year and easily pay for the wall. Just through that mechanism alone,"[1]

    Per Article 1 Section 9 of the constitution

    No Tax or Duty shall be laid on Articles exported from any State.[2]

    Does that clause not apply to exports outside of the United States as opposed to interstate trade (ex: KS wheat exported to Colorado)?

    I don't have real research or sources, which is why this is a comment; the Constitution is a *federal* document, so it could very well be that *states themselves* can tax exports, but the federal government cannot.

    No the states cannot tax exports either.

    I was under the understanding that the US subsidises rather than taxes many of its exports (despite its promotion of free trade).

    @williamcooper that's really not the case. There are very few things that are subsidized in the US, the biggest of which is probably ethanol, but that is for US consumption. Other Ag production is also subsidized however.

    @Delioth The Constitution is indeed a federal document in the original meaning of the word "federal". It defines the relationship between the states and the national government, explicitly prohibiting states from certain powers that are given to the national government. So it's wrong to say that it doesn't constrain state powers.

    @KDog Most exports aren't directly subsidized, but some are indirectly subsidized, such as via the Ex-Im Bank (i.e. by financing the purchases at possibly below-market interest rates.)

    @reirab Sure, the Exim Bank subsidizes Boeing mostly. Actually foreign countries buying Boeing. It's a mess.

  • K Dog

    K Dog Correct answer

    5 years ago

    I don't know what Spicer is going on about here, maybe on repatriation of earnings. But's it's sloppy. The US cannot tax an export, as you stated the Constitution states

    All exports are by definition outside of the US.

    My random guess (I can't get inside Spicer's head, yet), is that he may have been referring to other countries taxing US imports. No other possible interpretation seems to make sense.

    or he was talking about the US exporting labour (manufacturing jobs) and then importing the products of that labour (manufactured goods) back into the US. That exported labour leads to taxes in the US as now the remaining working have to pay the unemployment benefits of an ever increasing army of unemployed. Which would fit right in with the campaign rethoric employed by the Trump team for months.

    @jwenting it's much more probable that he simply misspoke

    @user4012 - An interpretation that he isn't familiar with that part of the Constitution or actual US taxation (iow: he's wrong) could also make sense.

    @T.E.D. - whether he's familiar enough to know that it's unconstitutional is less relevant, the point is, he was presumably referring to something that exists and not to something hypothetical.

    @user4012 - But this other interpretation has the benefit of surviving both Occam and Hanlon's razors. :-)

    @T.E.D. - it doesn't have the benefit of surviving basic English analysis. He was referring to *status quo* (`policy IS`), not some hypothetical new state. Presumably, status quo is already constitutional.

    @user4012 - ...right. So the simplest explanation is that he's wrong.

    @T.E.D. - if you include that in the universe of possibilities, correct. I'm going on the assumption that he was referring to *something* that exists, rather than something that doesn't.

    Maybe the tax on the cost of shipping things out of the country?

    There are lots of taxes on exports. Payroll, property, income, etc. They is no duty on them but there are plenty of taxes.

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Content dated before 7/24/2021 11:53 AM