Business

Biz groups push back on part of GOP tax plan

by Naomi Jagoda - 12/14/16 12:26 PM ET

Dozens of business groups are expressing concerns about a provision in the House Republicans’ tax reform plan, saying it could cause some companies to face “huge business challenges.”

In a letter sent to House Ways and Means Committee Chairman Kevin Brady (R-Texas) and incoming ranking member Richard Neal (D-Mass.), the groups took issue with a provision in the House GOP blueprint known as “border adjustments.” This provision would tax imports and exempt exports.

“Companies that rely on global supply chains would face huge business challenges caused by increased taxes and increased cost of goods, which would in turn likely result in reductions in employment, reduced capital investments and higher prices for consumers,” the groups said.

{mosads}The letter comes as congressional Republicans and President-elect Trump plan to make tax reform a priority next year.

House Republicans released their tax reform blueprint, part of Speaker Paul Ryan’s (R-Wis.) “Better Way” agenda, in June. Staff members on the House Ways and Means Committee are meeting with stakeholders about the plan and are working to turn the blueprint into legislation.

The business groups said they have a strong interest in comprehensive tax reform.

“We believe the Better Way Tax Reform proposal, without the border adjustment provision, can provide the basis for the strong economic growth we all seek without harming our businesses and burdening our consumers with higher prices,” they said.

More than 75 groups signed the letter, including the National Retail Federation, the Retail Industry Leaders Association, the Alliance of Automobile Manufacturers and the Association of Food Industries.

They’re not the only groups that have been critical of the border adjustments provision. Last week, Koch Industries said in a statement that the proposal could have “devastating” consequences to the economy and consumers in the long run.

Brady said in a statement that lawmakers are working to create a tax code that “will encourage companies to invest in America and create jobs at home.”

“Instead of focusing on one piece of our comprehensive plan, it’s important for companies to consider all of the aspects of our blueprint — including lower rates for corporations and a simpler international tax code,” he said. “The American people have made it clear now is the time to level the playing field and end the tax on ‘Made in America’ products.”

In an interview on Hugh Hewitt’s radio show Wednesday, incoming White House chief of staff Reince Priebus spoke favorably about border adjustments and said it would be a topic that Ryan and others would be considering.

“We want to see the potential for a change in that border adjustability so that American jobs are protected,” he said.

Tags Kevin Brady Paul Ryan