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Congress should expand foreign trade zones to include a value-added tax (VAT) incentive.

Congress should include a value-added tax (VAT) incentive for investing in foreign trade zones. At least 143 nations have VATs, which have the advantage of being border adjustable, meaning that exports are not taxed whereas imports are, thus improving U.S. competitive advantage. If Congress created a VAT in foreign trade zones, establishments in the foreign trade zones would be eligible to pay VAT taxes instead of corporate income taxes and these taxes would be waived on all foreign exports.