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Today’s Top Headlines




More Criticism Of Proposed US Border Adjustment Tax

by Scott Hamilton, Tax-News.com, Washington

23 February 2017

Americans for Affordable Products (AAP), a business coalition that opposes the proposed border adjustment tax, has responded to the February 21 letter to leading US lawmakers from the American Made Coalition (AMC) supporting border adjustability.

The House of Representatives Republican Party's controversial border adjustment tax proposal would adopt a corporate tax provision operating in a similar fashion to other countries' value-added tax systems, whereby tax would be imposed on imports and tax rebates would be provided on exported goods.

AAP is formed of more than 150 retail businesses and trade associations, such as The Gap, Best Buy, Abercrombie & Fitch, Target, Wal-Mart, Macy's, and Saks Fifth Avenue, and the American Apparel & Footwear Association and Association of Food Industries. AMC includes US multinationals with major overseas operations and substantial exporting capability, such as Boeing, Dow Chemical, GE, and United Technologies Corporation.

AMC's letter had noted that the BAT "would effectively end the 'Made in America' tax that creates an unfair advantage for foreign-based companies at the expense of US jobs and economic growth."

However, AAP has suggested that it could cause higher costs of up to 20 percent on everyday consumption items, or the equivalent of USD1,700 per year on middle-income households. In his response to AMC's letter, Joshua Baca, AAP's spokesperson, said that "working families would pay more for basic necessities such as clothes, food, medicine, and gasoline so that GE, Boeing, and other profitable companies could pay little or no taxes."

"The reality is that many of the companies taking part in AMC's efforts already pay an effective tax rate that is significantly lower than the statutory income tax rate and are asking consumers pay more so that they can pay even less," he continued.

Free-enterprise advocacy group Club for Growth has also released a statement by its President, David McIntosh, concerning a new series of TV and digital ads that it will air in states and districts across the United States to oppose the BAT.

"The BAT will drive up prices on everyday consumer goods like groceries, gas, clothes, and shoes," he commented. "House Republicans have offered good tax reform proposals, like lowering rates, repealing the Death Tax, and cleaning up the tax code, but the BAT will hurt American families."

TAGS: tax | business | law | corporation tax | multinationals | United States | tax breaks | tax reform | retail | trade | Tax

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