H.R.3363 - To amend the Internal Revenue Code of 1986 to impose a tax on United States-bound circumvented cargo through Canada or Mexico and entering the United States. (119th Congress)
Summary
H.R.3363 proposes to amend the Internal Revenue Code of 1986 by imposing a tax on United States-bound cargo that is circumventing direct entry by passing through Canada or Mexico. This tax would apply to cargo discharged from ocean-going vessels in Canada or Mexico and then entering the U.S. via rail, highway, airport, or inland port. The tax is set at 0.125 percent of the cargo's value, to be paid by the importer at the time of entry.
Expected Effects
The bill aims to discourage the practice of circumventing direct entry into the U.S. by routing cargo through Canada or Mexico. This could lead to increased costs for importers using this method, potentially shifting cargo handling back to U.S. ports. The revenue generated from the tax could be used for other government purposes.
Potential Benefits
- Potential Increase in Government Revenue: The tax could generate revenue for the U.S. government.
- Discourages Circumvention: May discourage the practice of routing cargo through Canada/Mexico to avoid certain regulations or taxes.
- Level Playing Field: Could create a more level playing field for U.S. ports and businesses.
- Potential Job Growth in U.S. Ports: Shifting cargo handling back to U.S. ports could lead to job creation.
- Addresses a Perceived Loophole: Closes a potential loophole in trade and tax regulations.
Most Benefited Areas:
Potential Disadvantages
- Increased Costs for Importers: The tax will increase costs for importers using Canadian or Mexican ports.
- Potential for Retaliation: Canada and Mexico could retaliate with similar taxes on U.S.-bound goods.
- Complexity in Implementation: Determining what constitutes 'circumvented cargo' may be complex and lead to disputes.
- Potential for Increased Consumer Prices: Increased costs for importers could be passed on to consumers.
- Impact on Trade Relations: Could strain trade relations with Canada and Mexico.
Most Disadvantaged Areas:
Constitutional Alignment
The bill falls under Congress's power to regulate commerce with foreign nations, as outlined in Article I, Section 8, Clause 3 of the Constitution (the Commerce Clause). The power to tax is also explicitly granted to Congress in Article I, Section 8, Clause 1. The bill does not appear to infringe on any specific constitutional rights or limitations.
Impact Assessment: Things You Care About ⓘ
This action has been evaluated across 19 key areas that matter to you. Scores range from 1 (highly disadvantageous) to 5 (highly beneficial).