Cohn, Mnuchin Oppose Border Tax, Hatch Says

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By Laura Davison and Kaustuv Basu

White House economic adviser Gary Cohn and Treasury Secretary Steven Mnuchin oppose including the border adjustment tax in a plan to reform the tax code, Senate Finance Committee Chairman Orrin G. Hatch (R-Utah) said.

“They’re against that,” Hatch told reporters May 9. “I think it’s hard to pass” in the Senate.

Senate Finance member Pat Roberts (R-Kan.) used a “thumbs down” motion to describe Mnuchin and Cohn’s position on the idea. Roberts also has said he has concerns about the provision. A spokesman for the White House didn’t immediately respond to a request for comment.

The border adjustment tax, which taxes imports and exempts exports, has been one of the most controversial aspects of the House Republican tax plan and has faced stiff opposition from importers, such as retailers and car dealers. President Donald Trump didn’t include the idea in the tax outline he released last month and some Senate Republicans have criticized the idea.

Despite resistance from the White House and Senate, House Ways and Means Committee Chairman Kevin Brady (R-Texas) has repeatedly said that border adjustment is the best way to make the tax system more competitive and to grow the U.S. economy.

Initial Agreement

Cohn and Mnuchin met with Republican Senate Finance Committee members May 9 to discuss a tax overhaul package. The meeting was a productive gathering with Trump administration officials, because there was more dialogue, Roberts said. In previous meetings about tax and trade, officials had read off a list of policy objectives, and “most senators can read,” he said.

“That was just the administration, sort of, talking about tax reform and trying to get feedback from members of the Senate Finance Committee,” said Sen. John Thune (R-S.D.), the chairman of the Senate Republican Conference. “So it’s basically sort of ‘Here’s what we want to do and tell us what you think and what are your priorities.' ”

Thune said there was agreement on some general principles. “How we get there, you know, is part of the process,” he said. “They’re committed to leaning in and engaging and trying to make sure that we get a bill that we can put on the desk and sign into law.”

The Trump administration released the outline of a tax plan April 26 that proposed a 15 percent business tax rate. Republican leaders in Congress have said they want to work on a unified tax plan that the House Ways and Means Committee can vote on.

The Trump outline didn’t include many revenue raisers. The Senate will have to look for ways to offset the cost of the Trump plan, Hatch said. The proposal has been estimated by think tanks to cost as much as $7 trillion over a decade.

“We’ll have to raise revenue, there is no question about that,” Hatch said. “We know where it all is, anyway.”

To contact the reporters on this story: Laura Davison in Washington at and Kaustuv Basu in Washington at

To contact the editor responsible for this story: Meg Shreve at

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