The statement
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"We tax our exports and don’t tax our imports."
Paul Ryan, House speaker, Jan. 25 on MSNBC’s For the Record With Greta
The ruling
The Wisconsin Republican emphasized the need to reduce business tax rates with Donald Trump as president. Then Ryan said:
"Oh, and by the way, here’s what the rest of the world does that we don’t do: They take the tax off of their exports and place a tax on their imports. We do the opposite. We tax our exports and don’t tax our imports. So, we’re . . . basically double-taxing made-in-America products."
Both parts of the Wisconsin Republican’s claim are "in principle true, but there’s a lot of important exceptions," said Joel Trachtman, professor of international law at the Fletcher School at Tufts University in Massachusetts.
There is no excise tax or tariff applied by the United States on goods sold to foreign customers.
But Ryan’s first point is that U.S. businesses pay income taxes on their worldwide income — that is, from exports as well as goods sold within the United States.
It’s worth noting, though, that multinational companies are often able to reduce or delay their payment of U.S. taxes on export-based income. And U.S. exporters also enjoy subsidies and other assistance from about 20 federal agencies.
Ryan’s second point is that a foreign company that sells goods from abroad into the United States does not pay any U.S. income taxes unless it has subsidiaries based in the United States or branches in the United States. For example, Toyota USA pays income taxes on cars made in Japan that it buys and resells to U.S. consumers.
But his statement ignores the existence of tariffs — another form of tax that is imposed on many goods as they come into the United States. On average, the tariff imposed at the border is 1.5 percent, according to a March 2016 report from the U.S. International Trade Commission.
Ryan’s office acknowledged to us that tariffs are another form of tax, but pointed out that he had been asked about the tax code, which is administered by the Internal Revenue Service rather than the U.S. Customs and Border Protection.
So, the first part of the statement is mostly on target. The second part of the claim is misleading in that there are no direct taxes on imports, but there are tariffs. For a statement that is partly accurate but leaves out important details, our rating is Half True.
Tom Kertscher, PolitiFact Wisconsin Read more rulings at PolitiFact.com.
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