Border tax fight intensifies on Tax Day

Groups that support and oppose House Republicans’ border-adjustment tax proposal intensified their advocacy on Tuesday’s tax-filing deadline.

The new efforts come at a critical time for the proposal, which would tax imports and exempt exports.

The border-adjustment tax is a key part of Speaker Paul Ryan’s (R-Wis.) “Better Way” tax plan and could raise $1 trillion to pay for lowering tax rates. But a number of retailers, conservative groups and GOP lawmakers fear that the proposal would translate to higher prices on goods for consumers, making its passage uncertain.

{mosads}House Republicans are moving ahead with writing a tax-reform bill based on the Ryan blueprint and hope to release legislation this spring. But legislation that includes the border-adjustment tax could have difficulty passing in the Senate, where many lawmakers have criticized the idea. The White House is working on its own tax plan, and it’s unclear whether the border proposal will be included.

The American Made Coalition, a group of businesses that supports the border-adjustment tax, posted a list on its website on what it considers to be the top five benefits of the Ryan plan. The coalition — whose members include Boeing, General Electric and Caterpillar — also released a digital video where people interviewed talk about the need for tax reform.

The American Made Coalition’s new materials do not explicitly mention the border-adjustment proposal, but they do argue that the “Better Way” tax plan would encourage goods to be produced in America while make the U.S. more competitive with the rest of the world. Those arguments are in line with the arguments made in favor of the border-adjustment tax.

“By updating our tax code, we will create a more business-friendly environment that will encourage investment in American production,” the coalition wrote. “More goods and services produced here in the U.S. means more jobs up-and-down the supply chain, from construction to factory workers to sales — the House Blueprint is a domestic job creator.”

Opponents of the border-adjustment tax also released new materials on Tax Day.

The conservative Club for Growth on Tuesday launched new ads urging four GOP lawmakers to come out against the tax: Reps. Diane Black (Tenn.), Martha Roby (Ala.), Tom Rice (S.C.) and John Culberson (Texas).

Black and Rice both serve on the tax-writing House Ways and Means Committee, and Black is also chair of the House Budget Committee. A spokesman for the Club for Growth said that the group is interested in targeting tax writers and rank-and-file members of the House.

The ads will air on TV and online in the lawmakers’ districts and are part of a $500,000 buy, the Club for Growth said.

The ads focus on the Club’s argument that the proposal would increase prices for consumers. Some of them describe the proposal as a tax on “Basically All Things,” a play off the BAT acronym for the tax proposal.

“The BAT would drive up prices on everyday items for typical American families,” said Club for Growth president David McIntosh. “Constituents in these four districts should urge their Representative to oppose the BAT, which would slam hard-working families with a massive new tax.”

The Club for Growth previously ran an ad urging Rep. Kristi Noem (R-S.D.) to oppose the border-adjustment tax.

A coalition of retailers called Americans for Affordable Products (AAP), meanwhile, released a video and a research paper on Tuesday arguing that the companies in the pro-border tax American Made Coalition already pay low taxes and would in many cases have no federal tax liability if the border-adjustment tax were implemented.

AAP’s paper said that American Made Coalition members have reported an average effective tax rate of 16.6 percent. The paper also argues that businesses that support the border-adjustment tax have received billions of dollars in subsidies and grants since 1992.

“After receiving billions in subsidies and exploiting tax loopholes, these profitable, multi-national corporations don’t deserve to receive a permanent tax holiday,” AAP spokesman Joshua Baca said in a news release. “On Tax Day 2017, it is time for Congress to put the interests of American families ahead of special interests and say no to the Border Adjustment Tax.”

American Made Coalition spokesman John Gentzel said in a statement after the release of AAP’s paper that “from the outset, opponents of comprehensive tax reform have made a million excuses to retain a broken tax code that places a greater value on foreign-made products over American-made goods produced by American workers.”

AAP, however, says it wants comprehensive tax reform but simply opposes a border-adjustment tax.

Brian Dodge — a spokesman for the Retail Industry Leaders Association, which is involved in AAP — said that the American Made Coalition’s latest advocacy efforts won’t persuade voters.

“If you need proof that the border adjustment tax is breathing its last gasps of air, look no further than the pitch offered by the proposal’s chief advocates,” he said.