The Republican’s proposed Border Adjustment Tax now has a big new opponent.
Recognizing there’s power in numbers, 100 businesses and trade associations representing a variety of different product and service categories banded together to form the Americans for Affordable Products (APA) coalition. The group hopes to persuade lawmakers to drop the overhaul plans.
According to the group’s website, apparel-related members of the new organization include Abercrombie & Fitch, Nike, Gap Inc., Kohl’s, LVMH, Macy’s, Payless ShoeSource, Wolverine Worldwide, Target and Ross Stores. The list also encompasses automotive, restaurant, pet goods, housewares and furniture corporations as well as myriad associations, including the Consumer Technology Association and the Society of Chemical Manufacturers & Affiliates.
The variety in the list shows the far-reaching effects the BAT would have on everyday life.
While the APA acknowledges that changes to the corporate tax code may be needed, it also says the planned overhaul would cause large burdens for each industry, threaten American jobs and cost U.S. consumers.
Their argument is, the proposed law, which would eliminate the ability of companies to deduct costs associated with imports, would add up to huge tax bills, forcing firms to increase prices on consumer goods and services. The National Retail Federation says if enacted, the tax would negatively impact American families to the tune of $1,700.
“The retail industry pays among the highest effective tax rates of all industries. We, therefore, enthusiastically support reforming the current tax code and welcome the fact that both the president and Congress do so as well. However, the Border Adjustment Tax is harmful, untested, and would put American retail jobs at risk and force consumers to pay as much as 20 percent more for family essentials. We are committed to working with Congress to ensure they understand the impact of this proposal, and to pursue tax reform that reduces rates and benefits American consumers,” stated Retail Industry Leaders Association president Sandy Kennedy.
NRF president and CEO Matthew Shay echoes these concerns, adding, “We support creating a less complicated, more straightforward and equitable tax code, and will work with both the administration and Congress to achieve that goal, but the Border Adjustment Tax is not the answer. Some may consider this a better way forward, but it is definitely not the best way.”
The coalition would rather see legislation that lowers the overall corporate tax rate as well as a territorial approach, which would limit taxes on U.S. companies to income earned in the United States only.
There has been some indication that President Trump is not on board with the BAT, which he called “too complicated,” but more recently the White House has made comments that indicate his stance might have changed.
The APA site features a cache of resources for anyone looking to learn more about the BAT and its possible impact on U.S. consumers as well as an opportunity to add your organization to the coalition.