Koch Industries warns about ‘devastating’ House GOP tax plan provision

Koch Industries on Wednesday expressed concerns with a feature of the House Republicans’ tax reform blueprint, saying it could have “devastating” consequences to the economy in the long run.

The company, owned by billionaire conservative mega-donors Charles and David Koch, criticized a provision in the tax plan known as border adjustments, under which imports would be taxed and exports would not be taxed. House Republicans plan to use their blueprint as the starting point for tax reform legislation.

{mosads}Philip Ellender, president of government and public affairs for Koch Companies Public Sector, said that Koch Industries supports comprehensive tax reform but is concerned that border adjustments would hurt consumers because they would end up paying higher prices on imported products.

“The proposed border tax adjustment will distort the market, increase consumer prices and create an uneven playing field for companies and consumers alike,” he said. “Our tax system should encourage, not destroy, free exchange and trade resulting in robust commerce and lower, not higher, prices for consumers.”

Ellender said that Koch and other companies that manufacture goods domestically would benefit from the border adjustments proposal in the short term. However, “the long-term consequences to the economy and the American consumer could be devastating.”

House Ways and Means Committee Chairman Kevin Brady (R-Texas) defended the border adjustments feature, saying it “improves our global competitiveness” and eliminates incentives for businesses to move their headquarters and jobs overseas.

He said he appreciates Koch Industries’ feedback and its support for comprehensive tax reform.

“I look forward to working with Koch Industries and all job creators as we continue to turn our blueprint into legislation,” Brady said in a statement.

Koch Industries has not been the only business to express concerns about the border adjustments proposal. The provision has also drawn concerns from retail groups such as the Retail Industry Leaders Association.

– updated Dec. 8 at 9:41 a.m.