The fight over border adjustment tax continues.
Just six days after retail CEOs met with the President in Washington to make their case against the proposed tax reform provision, The American Made Coalition has issued a letter to Congress urging them to enact the Republican tax plan.
The appeal–which was addressed to Speaker Paul Ryan, Majority Leader Mitch McConnell and Democratic Leaders Nancy Pelosi and Chuck Shumer–contends that the current tax code threatens the health of the U.S. economy by giving foreign-made goods an advantage in the American market. The group says our laws are “outdated,” pointing to reforms in other nations that involve territorial taxes and lower rates. “We have the highest business tax rate in the developed world and are one of the few countries that taxes business income on a worldwide basis,” the letter says.
The group champions House Republican’s “A Better Way” plan, which it said would increase wages and create 1.7 million new American jobs. It would also encourage investment in U.S. firms, stop acquisitions of U.S. companies, and level the playing field against imports, they argue.
The letter refers to the border adjustment provision, in particular, calling it a “critical” component. This portion of the code would reduce corporate taxes from 35% to 20%, tax the cost of goods sold on imports, and make exports exempt. The authors of the plan say it would raise $1 trillion in revenue, which would offset the lower tax rate. “This reform is consistent with the tax policies of nearly every other country in the world, and it would effectively end the ‘Made in American’ tax that creates an unfair advantage for foreign-based companies at the expense of U.S. jobs and economic growth,” the group states.
The letter was signed by CEOs from 16 corporations, including Boeing, Dow Chemical, Eli Lilly, GE, Raytheon and Caterpillar.
Meanwhile, those opposed to the plan have continued their vocal dissent. The Americans for Affordable Products, which includes more than 100 consumer products companies and associations like Belk, Nike, Clarks, QVC, Walmart and Saks, plans to hold a press conference on Thursday at the South Carolina State House in Columbia to lobby Senators Tim Scott and Lindsey Graham to block the policy.
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While the battle between the two sides wages on, some worry the window of opportunity for tax reform will close with no resolution. To get lawmakers focused on the aspects it feels would have the biggest impact on the economy, the Information Technology & Innovation Foundation think tank outlined the five things a tax overhaul must include. The list includes a lower corporate tax and incentives for capital investment. It does not include border adjustment, which the group highlighted as one provision that could stall the momentum toward change.