How Trump's Border Tax Could Boost Your Property Insurance Rate

As Congress and the White House begin talks to reform the U.S. tax code, Texans should be particularly concerned. The taxes on imports that federal lawmakers are considering would force Texas consumers to spend $3.39 billion more on property insurance over the next decade.That figure comes from research I and my colleagues conducted in a new joint paper from the Texas Public Policy Foundation and the R Street Institute, finding that the proposed border-adjustment tax would be a bad deal for Texas and for other states, including California and Florida, that are exposed to major natural disasters. Our primary concern is that the tax will lead to much higher costs for reinsurance, the primary tool insurance companies use to spread risk around the globe.The reason that Republicans are eager to find a new source of income comes down to the hoops they have to jump through to make tax reform stick. Without garnering 60 votes in the Senate (a requirement of that chamber's Byrd Rule and budget-reconciliation process) Republicans have to present a plan that's either raises more revenue or is revenue-neutral if they want the changes to last more than 10 years. That means they must find a way to offset, or "pay for," their tax cuts via new sources of revenue. This is how the prospect of a border-adjustment tax came to light.  Continue reading...