Question A:
Implementing a "destination based cash flow tax (including border adjustment)" of the type advocated by Speaker Ryan would substantially reduce the US trade deficit within the next few years.
Responses
© 2025. Kent A. Clark Center for Global Markets.
26%
7%
5%
24%
29%
10%
0%
Responses weighted by each expert's confidence
© 2025. Kent A. Clark Center for Global Markets.
8%
35%
46%
11%
0%
Question B:
Implementing a “destination based cash flow tax (including border adjustment)” of the type advocated by Speaker Ryan would substantially raise prices for US consumers.
Responses
© 2025. Kent A. Clark Center for Global Markets.
26%
10%
0%
17%
24%
21%
2%
Responses weighted by each expert's confidence
© 2025. Kent A. Clark Center for Global Markets.
0%
19%
40%
33%
7%
Question A Participant Responses
Participant |
University |
Vote |
Confidence |
Bio/Vote History |
|---|---|---|---|---|
 Daron Acemoglu |
MIT | Bio/Vote History | ||
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Replacing the sales tax with a value-added tax would be a good idea. This is less clear, but no major effect deficit.
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 Alberto Alesina |
Harvard | Did Not Answer | Bio/Vote History | |
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 Joseph Altonji |
Yale | Bio/Vote History | ||
 Alan Auerbach |
Berkeley | Bio/Vote History | ||
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 David Autor |
MIT | Bio/Vote History | ||
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I'm reasonably persuaded by Auerbach and Holtz-Eakin, but I'm not certain that U.S. currency will fall one-for-one with the border tax
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 Katherine Baicker |
University of Chicago | Did Not Answer | Bio/Vote History | |
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 Abhijit Banerjee |
MIT | Did Not Answer | Bio/Vote History | |
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 Marianne Bertrand |
Chicago | Bio/Vote History | ||
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 Markus Brunnermeier |
Princeton | Bio/Vote History | ||
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Only in the short-run possibly. In the long-run, dollar appreciation will reduce the advantage of US exporters.
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 Raj Chetty |
Harvard | Did Not Answer | Bio/Vote History | |
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 Judith Chevalier |
Yale | Bio/Vote History | ||
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I understand the exchange rate argument but am not certain of a full offset.
-see background information here |
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 David Cutler |
Harvard | Bio/Vote History | ||
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 Angus Deaton |
Princeton | Bio/Vote History | ||
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 Darrell Duffie |
Stanford | Bio/Vote History | ||
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I am assuming that trade retaliation and changes in foreign exchange prices are not big enough within three years to overcome the effect.
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 Aaron Edlin |
Berkeley | Did Not Answer | Bio/Vote History | |
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 Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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Would depend on the reaction of other variables affecting investment & saving, starting with the exchange rate.
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 Liran Einav |
Stanford | Bio/Vote History | ||
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 Ray Fair |
Yale | Bio/Vote History | ||
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 Amy Finkelstein |
MIT | Bio/Vote History | ||
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 Pinelopi Goldberg |
Yale | Bio/Vote History | ||
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 Austan Goolsbee |
Chicago | Bio/Vote History | ||
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It's just like a VAT. Countries with VATs do not get a trade advantage. Consumers pay same rate on import/domestic. Exch rates offset/adjust
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 Michael Greenstone |
University of Chicago | Did Not Answer | Bio/Vote History | |
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 Robert Hall |
Stanford | Did Not Answer | Bio/Vote History | |
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 Oliver Hart |
Harvard | Bio/Vote History | ||
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I don't know what the effects of a destination based tax would be or whether it would improve matters. I would prefer a consumption tax.
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 Bengt Holmström |
MIT | Bio/Vote History | ||
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 Caroline Hoxby |
Stanford | Did Not Answer | Bio/Vote History | |
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 Hilary Hoynes |
Berkeley | Bio/Vote History | ||
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 Kenneth Judd |
Stanford | Bio/Vote History | ||
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The impact will not be "substantial". Trade deficit implies capital surplus; what is bad about that?
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 Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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 Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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Currency offset is unlikely to be one for one, so some trade effects are likely. Magnitude would depend on the size of the tax.
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 Pete Klenow |
Stanford | Bio/Vote History | ||
 Jonathan Levin |
Stanford | Bio/Vote History | ||
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 Eric Maskin |
Harvard | Did Not Answer | Bio/Vote History | |
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 William Nordhaus |
Yale | Bio/Vote History | ||
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Substantially needs defining, but because unlikely full ex rate adjustment, not negligible effect.
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 Emmanuel Saez |
Berkeley | Bio/Vote History | ||
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 Larry Samuelson |
Yale | Bio/Vote History | ||
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There are too many unknowns, including the reactions of other countries, to have any confidence that this would reduce the deficit.
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 José Scheinkman |
Columbia University | Did Not Answer | Bio/Vote History | |
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 Richard Schmalensee |
MIT | Bio/Vote History | ||
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 Carl Shapiro |
Berkeley | Did Not Answer | Bio/Vote History | |
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 Robert Shimer |
University of Chicago | Bio/Vote History | ||
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 Richard Thaler |
Chicago Booth | Bio/Vote History | ||
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 Christopher Udry |
Northwestern | Bio/Vote History | ||
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Should have only second order effects. Imperfect exchange rate adjustment may cause more real impact, but "substantial" not plausible.
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Question B Participant Responses
Participant |
University |
Vote |
Confidence |
Bio/Vote History |
|---|---|---|---|---|
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Daron Acemoglu |
MIT | Bio/Vote History | ||
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Alberto Alesina |
Harvard | Did Not Answer | Bio/Vote History | |
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Joseph Altonji |
Yale | Bio/Vote History | ||
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Alan Auerbach |
Berkeley | Bio/Vote History | ||
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David Autor |
MIT | Bio/Vote History | ||
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If dollar does not lose value to fully offset tax, then yes, consumer prices will rise.
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Katherine Baicker |
University of Chicago | Did Not Answer | Bio/Vote History | |
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Abhijit Banerjee |
MIT | Did Not Answer | Bio/Vote History | |
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Marianne Bertrand |
Chicago | Bio/Vote History | ||
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Markus Brunnermeier |
Princeton | Bio/Vote History | ||
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Raj Chetty |
Harvard | Did Not Answer | Bio/Vote History | |
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Judith Chevalier |
Yale | Bio/Vote History | ||
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David Cutler |
Harvard | Bio/Vote History | ||
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Angus Deaton |
Princeton | Bio/Vote History | ||
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Darrell Duffie |
Stanford | Bio/Vote History | ||
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Aaron Edlin |
Berkeley | Did Not Answer | Bio/Vote History | |
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Barry Eichengreen |
Berkeley | Bio/Vote History | ||
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Would depend on the reaction of other variables, starting with the exchange rate.
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Liran Einav |
Stanford | Bio/Vote History | ||
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Ray Fair |
Yale | Bio/Vote History | ||
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Amy Finkelstein |
MIT | Bio/Vote History | ||
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Pinelopi Goldberg |
Yale | Bio/Vote History | ||
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Austan Goolsbee |
Chicago | Bio/Vote History | ||
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The point of the tax is to shift fr/producers who are mobile to consumers who aren't. That means consumer prices go up. There's no magic.
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Michael Greenstone |
University of Chicago | Did Not Answer | Bio/Vote History | |
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Robert Hall |
Stanford | Did Not Answer | Bio/Vote History | |
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Oliver Hart |
Harvard | Bio/Vote History | ||
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I don't know what the effects of a destination based tax would be or whether it would improve matters. I would prefer a consumption tax.
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Bengt Holmström |
MIT | Bio/Vote History | ||
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Caroline Hoxby |
Stanford | Did Not Answer | Bio/Vote History | |
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Hilary Hoynes |
Berkeley | Bio/Vote History | ||
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Kenneth Judd |
Stanford | Bio/Vote History | ||
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Certainly in the short run.
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Steven Kaplan |
Chicago Booth | Bio/Vote History | ||
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Anil Kashyap |
Chicago Booth | Bio/Vote History | ||
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Magnitude hard to judge but lobbying by Walmart is not an accident, some pass through into prices likely.
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Pete Klenow |
Stanford | Bio/Vote History | ||
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Jonathan Levin |
Stanford | Bio/Vote History | ||
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Eric Maskin |
Harvard | Did Not Answer | Bio/Vote History | |
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William Nordhaus |
Yale | Bio/Vote History | ||
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"Substantially" here would mean 1 -2 % on level of CPI.
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Emmanuel Saez |
Berkeley | Bio/Vote History | ||
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Larry Samuelson |
Yale | Bio/Vote History | ||
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Whatever the effect on the deficit, it is likely to have adverse effects on domestic prices.
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José Scheinkman |
Columbia University | Did Not Answer | Bio/Vote History | |
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Richard Schmalensee |
MIT | Bio/Vote History | ||
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Carl Shapiro |
Berkeley | Did Not Answer | Bio/Vote History | |
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Robert Shimer |
University of Chicago | Bio/Vote History | ||
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Richard Thaler |
Chicago Booth | Bio/Vote History | ||
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Christopher Udry |
Northwestern | Bio/Vote History | ||
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