Unpopularly-elected and Russia-installed President Donald Trump made news Thursday when his press secretary unveiled a plan to tax Mexican imports in order to pay for the border wall. The Trump administration went back and forth over the seriousness of the plan, but in a little-noticed bombshell, freely acknowledged that it violates their promise to make Mexico foot the bill.
Donald Trump took a beating from Mexican President Enrique Peña Nieto when Peña Nieto responded to Trump's demand that Mexico pay for his absurd border wall by canceling their meeting next week. Trump's answer to that was to have his press secretary propose a 20% tax on Mexican imports.
Sean Spicer unveiled the plan during a briefing aboard Air Force One (from a pool report, via email from The White House):
When you look at the plan that’s taking shape now, using comprehensive tax reform as a means to tax imports from countries that we have a trade deficit from, like mexico. If you tax that $50 billion at 20 percent of imports – which is by the way a practice that 160 other countries do – right now our country’s policy is to tax exports and let imports flow freely in, which is ridiculous. By doing it that we can do $10 billion a year and easily pay for the wall just through that mechanism alone. That’s really going to provide the funding.
White House Chief of Staff Reince Priebus later tried to walk back Spicer's statement by calling the proposed tax part of a "buffet of options," but then Trump walked it forward again in comments to NBC News' Peter Alexander:
Trump later was asked by NBC News about the 20 percent import tax and replied, "We're going to tax people coming in. Look, we cannot lose our companies to Mexico or any other place and then have them make the product and just send it across our border free. We're going to put a substantial tax on those countries."
One of many glaring flaws in this plan to start a trade war with one of our most important export markets is that the proposed tax would not be paid by Mexico, as Trump has promised, but rather by U.S. consumers. More outrageously, Trump's administration freely admits this.
In later remarks aboard Air Force One, Spicer did not dispute that consumers would pay, only promising that they would make up the money through magical growth spurred by the wall (from a pool report, via email from The White House):
American consumer pay for that?
I think what it's going to do is lift up the wages of American workers as well. Right now we have an influx of cheap labor. It's going to put the American consumer back, net net, to make sure the American workers get lifted up as well.
By having increased immigration standards, protecting the country and ensuring economic growth, the economy is going to grow, our deficit is going to go down.There are huge economic benefits beyond it. And remember as I mentioned, making sure that its going to be a net savings as well in terms of the number of personnel and resources needed to fortify and strengthen our southern border.
Spicer's comments were echoed by Priebus:
Pressed on whether such a tax would increase costs for American consumers, Spicer said there would be offsetting "dynamic" benefits to having a border wall paid for by a border tax.
"Right now they're also paying for the flood of illegal immigration coming in and the cost to US workers from that," he said. "They're paying for increased costs to secure the border and border agents, so it's a cost benefit analysis you need to do."
So it is now the official position of the Trump administration that U.S. taxpayers will fund construction of the border wall up front, then will also reimburse the government for the wall through the border tax — but they will be able to afford it. This is a broken promise, full stop.
What is worse, though, is that the tax being proposed will fall disproportionately on low and middle income Americans, who spend greater percentages of their income on consumer goods. Additionally, existing "border adjustment tax" proposals are supposed to be used to offset reductions in corporate taxes, meaning there would be no extra money to pay for the wall. Finally, such a tax could cost thousands of jobs in the U.S from companies that rely on exports, and businesses that rely on low-cost Mexican imports.
Trump's border wall is a cruel measure toward Mexican immigrants, and it is also a cruel joke on his own supporters, who will, along with the rest of us, have to fund his broken promise.