Trump criticizes controversial piece of House GOP tax plan

Donald Trump
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President-elect Donald Trump criticized a key piece of the House Republicans’ tax-reform plan that has also been drawing opposition from some businesses.

Trump told The Wall Street Journal in an interview published Monday that he is not a fan of the “border adjustment” proposal, which would tax imports and exempt exports. 

“Anytime I hear border adjustment, I don’t love it,” he said. “Because usually it means we’re going to get adjusted into a bad deal. That’s what happens.”

Trump, who has proposed lowering the corporate tax rate to 15 percent, told the Journal that he didn’t think border adjustment was needed in addition to lower taxes.

{mosads}“Under the border adjustment concept, if somebody is making a motorcycle or a plane in our country, they’re getting a credit for the plane they make before they send it over to wherever it’s going,” he said. “And you don’t need that plus lower taxes and everything else.

“And it’s too complicated. They get credit on some parts and not other parts. Where was the part made? I don’t want that. I just want it nice and simple.”

Trump’s comments come as Republicans on the House Ways and Means Committee are working to develop tax-reform legislation that includes the border-adjustment proposal. Tax reform is a top agenda item for both Trump and congressional Republicans, and House Speaker Paul Ryan (R-Wis.) and top advisers to Trump met to discuss the topic last week.

Retail groups and Koch Industries have also voiced their opposition to border adjustments, saying they would increase prices for consumers.

But House Republicans have been defending the border-adjustment proposal, saying that it would remove incentives for companies to move jobs overseas and make the U.S. tax system more like those of other countries. They view it preferable to the 35-percent tariffs that Trump has floated for companies that move factories to other countries.

“Speaker Ryan is in frequent communication with the president-elect and his team about reforming our tax code to save American jobs and keep the promises we’ve made,” said spokeswoman AshLee Strong. “Changing the way we tax imports and exports is a big part of that, and we’re very confident we’ll get it done.” 

Incoming White House chief of staff Reince Priebus also appeared to support border adjustments in a radio interview last month.

Analysts have found that the proposal is one of the biggest revenue raisers in the House GOP plan and could be used to pay for other tax cuts. Some analysts have also suggested that retailers would not be hurt by border adjustments because the U.S. dollar would strengthen.

Tags Donald Trump Paul Ryan

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