Bourse Investors Join Avocado Lovers in Potential Border-Tax Hit
- Stocks and bonds held in foreign currencies could be affected
- Dollar is expected to strengthen under tax on imported goods
Wal-Mart shoppers aren’t the only ones who could suffer under a tax plan that President Donald Trump is warming up to -- U.S. investors who trade on the London Stock Exchange, the Deutsche Boerse and Euronext might also take a hit.
Stocks and bonds denominated in foreign currencies might lose as much as 15 percent of their value when their U.S. holders convert them into dollars -- one of the effects of a so-called border-adjusted tax, according to Paul Christopher, an economist at Wells Fargo & Co. That’s because economists expect that the dollar would strengthen under the tax proposal, which would replace the U.S. corporate income tax with a levy on U.S. companies’ domestic sales and imports, while exempting their exports from taxable income.