Senate Dem: Border-adjustment proposal would be a ‘gut punch’ for working families

The top Democrat on the Senate Finance Committee ripped a key tax reform priority for House Republicans on Friday, calling it a “gut punch to working families already struggling to get by.”

Sen. Ron Wyden (D-Ore.) said House Republicans’ border-adjustment proposal, which would tax imports but exempt exports, would dramatically raise the price of basic goods.

Border adjustment is a key part of the House GOP tax reform plan championed by House Speaker Paul Ryan (R-Wis.) and Ways and Means Committee Chairman Kevin Brady (R-Texas). Supporters say border adjustment can bolster American manufacturing while raising more than $1 trillion in revenue over 10 years.

But critics say the tax will force retailers to hike prices on essential goods, forcing middle- and working-class Americans to stretch out already thin budgets.

{mosads}Wyden, a leading Senate progressive, called border adjustment “a grocery tax” levied to pay for “a trillion-dollar corporate tax cut.”

“Republicans want to raise prices on food, clothing and other simple products Americans buy every day,” Wyden said at the Urban Institute’s Tax Policy Center. “That’s not a plan to fix what’s broken in our economy today.”

Brady told The Hill that “no one can defend our current tax code that favors foreign products over products made in Texas, Oregon and other states across our country.”

“The American people also cannot afford a tax code that chases their jobs overseas,” said Brady in a statement. “We are open to working with members on both sides of the aisle on pro-growth tax reform that will create jobs and finally level the playing field for American workers.”

While popular with House Republicans, border adjustment has divided Senate Republicans and the corporate world, pitting exporters against importers. President Trump initially panned border adjustment, but later said he’d be open to a “border tax,” without specifying what that meant.

Wyden also rebuked Treasury Secretary Steven Mnuchin’s promise to complete comprehensive tax reform by August, an ambitious pledge given Republicans’ daunting legislative agenda. He said the tax overhaul would only pass by August if Republicans “bulldoze their way to a tax cut for the wealthy that lasts some amount of time.”

“You cannot pass a lasting, bipartisan, comprehensive tax reform bill by August that sets our economy on a new course,” said Wyden. “That’ll only come through bipartisanship.” 

Updated at 3:07 p.m.