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Border Adjustment Tax Opponents Make a Run During Recess

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Despite murmurings that the Republican tax overhaul is losing steam, those companies that oppose the border adjustment tax portion of the plan are using the Congressional recess to galvanize support.

The A Better Way tax bill, which was introduced over the summer, calls for sweeping corporate and individual tax reform. And while many companies are in favor of updating the existing tax code, it’s the details of the plan that have businesses divided. The wedge issue is the border adjustment tax (BAT), which would drop corporate rates from 35 percent to 20 percent, but tax imports.

The National Retail Federation began rallying support among the public in February when it launched an ad campaign that highlighted the $1,700 a year it says the BAT would cost families.

The Americans for Affordable Products (AAP), a group of 400 corporate and association members that has sprung up to oppose the BAT, has also been outspoken about its view that the change would drive consumer prices up and risk thousands of jobs.

The association released the results of a poll of 800 likely voters that illustrates how everyday Americans feel about the BAT and its consequences. Overall, the survey, which was conducted by The Tarrance Group, found that 63 percent of those polled are against the BAT. Fifty-three percent of respondents are not willing to accept higher prices even with the promise of more American jobs. An even larger percentage (56 percent) said if their Congressperson voted for the BAT, he or she would lose their vote.

“The Border Adjustment Tax is a deeply flawed policy that is widely opposed by voters and threatens any Republican supporting it,” said Joshua Baca, spokesperson for Americans for Affordable Products, in a statement. “As voters learn the Border Adjustment Tax would result in higher prices for everyday necessities they purchase in exchange for large, profitable, multi-national companies operating virtually tax free, they completely reject the policy as a non-starter. Plain and simple: it is time to listen to the American people, sideline the Border Adjustment Tax, and advance tax reform that lowers rates and eliminates loopholes exploited by special interests.”

The AAP is spending the recess meeting with lawmakers and the public. According to Reuters, the group will host a town hall in Nevada with Republican Sen. Dean Heller and a discussion in Ohio with Republican Rep. David Joyce and local furniture store owners. The group also plans to continue touting its message online and through social media in key states.

At the same time, the Retail Industry Leaders Association will lead members of Congress on tours of its facilities to illustrate how the BAT could negatively affect their businesses.

Meanwhile, several Congressmen have already expressed doubts about the bill and the likelihood that it would pass. For example, Wisconsin Sen. Ron Johnson (R) has said, “I don’t think the border adjustment tax has a chance of passage.” And Texas Sen. John Cornyn (R) stated, “That border adjustment part is based on assumptions I’m not sure are true.”

This dissent coupled with the recent healthcare defeat, puts the reform, as written, on less sure ground.

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