Harvard's Marty Feldstein Says Border Tax 'Misunderstood'

The video discusses the proposed border adjustment tax by President Trump, highlighting a warning from the New York Fed about its potential impact on US imports and exports. A professor disagrees, arguing that critics misunderstand the tax's effects, particularly how it would not raise consumer prices or lower American business profits. Instead, it could generate significant revenue from foreign exporters, aiding corporate tax cuts. The discussion also covers potential price adjustments, economic implications, and the risk of retaliation, emphasizing the importance of collaboration between Congress and the administration.

What concern did the New York Fed express about the border adjustment tax?

• It might not lead to a full appreciation of the US dollar.

• It would boost consumer spending.

• It would increase US exports significantly.

• It would decrease the national debt.

According to the professor, what is a common misconception about the border adjustment tax?

• It will reduce government revenue.

• It will increase consumer prices.

• It will decrease foreign investments.

• It will boost American business profits.

How much revenue does the professor claim the border adjustment tax could generate over a decade?

• $500 billion

• $1 trillion

• $2 trillion

• $750 billion

What is the professor's view on the potential price adjustments due to the border adjustment tax?

• Prices will increase drastically.

• Prices will remain unchanged.

• Prices will decrease significantly.

• Prices will adjust as expected by economists.

Who does the professor believe will ultimately bear the burden of the border adjustment tax?

• American consumers

• Foreign producers

• US government

• Local businesses