For over 50 years, Bloomberg Tax’s renowned flagship daily news service, Daily Tax Report® has helped leading practitioners and policymakers stay on the cutting edge of taxation and...
House Republicans crafting a tax overhaul plan are exploring ways to design a bill that will allay concerns about a proposed import tax, Ways and Means Chairman Kevin Brady (R-Texas) said at a Washington forum.
Brady said at a Georgetown Law School forum that he has been asking for “ideas to make sure we get the design right, the mechanics right and the transition right.” But there would be no special exceptions for any kind of importers, he said.
The comments capped a week that saw the launch of two dueling groups of U.S. businesses, for and against the idea of a tax on imports, with Speaker Paul D. Ryan (R-Wis.) and Brady backing the idea both at forums and to the media. But Senate Finance Committee Chairman Orrin G. Hatch (R-Utah) and others senators said they have questions about the border adjustability idea and how it would affect specific industries and consumers.
Import-reliant retailers and net exporters, such as Pfizer Inc. and Boeing Co., have clashed over this key provision of the House Republican tax plan. Proponents say it would boost domestic manufacturing. Opponents say the 20 percent import tax would raise prices on consumer products.
Brady reiterated that border adjustments would be compliant with the World Trade Organization, and that common ground on the plan is growing between the Trump administration and the House GOP.
The National Retail Federation estimated the proposed tax “could cost the average family $1,700 in the first year alone,” citing an analysis it commissioned from Ernst & Young LLP.
The plan, which taxes imports but not exports, doesn’t subsidize products sent overseas at the expense of imports, economist Alan Auerbach of the University of California Berkeley said at the Georgetown forum.
Much of the opposition and support for border adjustability is based on a “mistaken understanding” about how the system would work, said Auerbach, an economist who helped design the plan.
Auerbach said the plan’s elimination of interest deductibility has a more direct impact on industries that rely heavily on leverage, such as private equity and real estate. Opposition from those groups has been much quieter, he said.
To contact the editor responsible for this story: Meg Shreve at firstname.lastname@example.org
Copyright © 2017 The Bureau of National Affairs, Inc. All Rights Reserved.
All Bloomberg BNA treatises are available on standing order, which ensures you will always receive the most current edition of the book or supplement of the title you have ordered from Bloomberg BNA’s book division. As soon as a new supplement or edition is published (usually annually) for a title you’ve previously purchased and requested to be placed on standing order, we’ll ship it to you to review for 30 days without any obligation. During this period, you can either (a) honor the invoice and receive a 5% discount (in addition to any other discounts you may qualify for) off the then-current price of the update, plus shipping and handling or (b) return the book(s), in which case, your invoice will be cancelled upon receipt of the book(s). Call us for a prepaid UPS label for your return. It’s as simple and easy as that. Most importantly, standing orders mean you will never have to worry about the timeliness of the information you’re relying on. And, you may discontinue standing orders at any time by contacting us at 1.800.960.1220 or by sending an email to email@example.com.
Put me on standing order at a 5% discount off list price of all future updates, in addition to any other discounts I may quality for. (Returnable within 30 days.)
Notify me when updates are available (No standing order will be created).
This Bloomberg BNA report is available on standing order, which ensures you will all receive the latest edition. This report is updated annually and we will send you the latest edition once it has been published. By signing up for standing order you will never have to worry about the timeliness of the information you need. And, you may discontinue standing orders at any time by contacting us at 1.800.372.1033, option 5, or by sending us an email to firstname.lastname@example.org.
Put me on standing order
Notify me when new releases are available (no standing order will be created)