Business

Retailers get aggressive in fight over GOP tax plan

by Naomi Jagoda - 03/27/17 3:56 PM ET

Retail groups are intensifying their effort to kill the proposed border-adjustment tax from House Republicans as the agenda in Congress shifts to tax reform following the failure of ObamaCare repeal.

Under the border-adjustment proposal, imports would be subject to U.S. tax and exports would be exempt. Supporters of the proposal argue that it would boost domestic manufacturing. Opponents argue that the tax will result in higher prices for consumers.

Industry groups have been battling over the tax plan for months, but that lobbying is shifting into a higher gear now that ObamaCare repeal — which had been expected to dominate the spring legislative agenda — is on ice.

{mosads}On Friday afternoon, a coalition of retailers against the tax called Americans for Affordable Products sent out an email with the subject line “With Healthcare Reform Bill Pulled, Focus Increases On Congress’ Border Adjustment Tax.”

The coalition announced in a press release Monday that it now has more than 400 members. The group argued the border-adjustment proposal threatens the ability of House Republican leaders to accomplish tax reform.

“If leaders in the U.S. House learned anything from the failure of healthcare reform, they will acknowledge the lack of support for the border-adjustment tax and sideline it in the interests of passing legislation that lowers the rates across the board and eliminates loopholes exploited by the same companies seeking to operate tax-free,” Americans for Affordable Products spokesman Joshua Baca said.

Both supporters and opponents of the border-adjustment proposal are vying for the upper hand in the debate.

The Retail Industry Leaders Association (RILA), which helped to organize the coalition, sent an email to reporters Monday aimed at rebutting the argument from House Ways and Means Committee Chairman Kevin Brady (R-Texas) that every other country already has a border-adjustment tax, characterizing the statement as false.

The coalition also last week released a digital video criticizing Brady that asks viewers who they believe: “a politician or America’s business leaders on what’s best for America’s businesses?”

RILA spokesman Brian Dodge said that retailers are working with other businesses and thought leaders to warn against the border-adjustment proposal.

“Recognizing that the sponsors of the [border-adjustment tax] wield enormous power, we have always planned on this being a long and robust fight, and we are under no illusions that anything has changed in that regard,” he said.

Meanwhile, a pro-border-tax group of businesses called the American Made Coalition released a digital video on Monday highlighting comments from current and former retail leaders that are favorable toward the House Republicans’ tax plan and border adjustability.

“While the opposition is content with policies that promote foreign-made products over U.S. jobs, our coalition is working toward a comprehensive update to the tax code that levels the playing field for all American businesses,” American Made Coalition spokesman John Gentzel said.

Brady said Sunday on Fox News that border adjustability helps to simplify the tax code and that his committee is working on “significant modifications” to make sure the provision is phased in and designed well.

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