One of the biggest challenges to enacting comprehensive tax reform is overcoming the misunderstandings about how various components of the plan work and how they impact taxpayers and the broader economy.
For example, there have been a lot of conflicting reports recently about the business provisions in the House GOP tax reform “Blueprint,” especially the effect of the border adjustment on importers in each state.
In analyzing the effects of a major tax reform plan such as the Blueprint, care must be taken to measure its economic impact comprehensively, not on a piecemeal basis. The Tax Foundation does this by using our Taxes and Growth (TAG) Macroeconomic Tax Model. The TAG model takes into account all aspects of a tax plan to produce estimates of the effects of the plan on GDP, investment, wages, jobs, and federal tax revenues.
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