The CEOs of several major companies are coming to the defense of the border-adjustment tax amid growing doubts about the idea in the Senate.
Border adjustability, which would subject imports to U.S. tax and exempt exports, “is consistent with the tax policies of nearly every other country in the world, and it would effectively end the ‘Made in America’ tax that creates an unfair advantage for foreign-based companies at the expense of U.S. jobs and economic growth,” the CEOs wrote in a letter to congressional leaders Tuesday.
Sixteen business leaders signed the letter, including the CEOs of Boeing, General Electric Co., McIlhenny Company, Pfizer and S&P Global. All of the businesses on the letter are members of the American Made Coalition, a group that launched earlier this month to support the border-adjustment tax.
The border-adjustment tax is a key element of the House Republicans’ reform blueprint. If implemented, it would raise more than $1 trillion in revenue for the government — money that could pay for the cost of lowering tax rates.
But the idea is facing fierce pushback from other parts the business world, with retailers in particular warning the border tax would significantly increase the cost of consumer goods.
“We oppose any border adjustment tax (BAT) because it will increase the cost of clothing, food, medicine, gas, and other essential items that Americans rely on,” said Americans for Affordable Products, a coalition of retailers and trade associations formed specifically to fight the tax.
In the Senate, meanwhile, the tax proposal has received a frosty reception, with some expressing skepticism or outright opposition.
Sen. Lindsey GrahamLindsey Olin GrahamMayorkas tests positive for COVID-19 breakthrough case A pandemic of hyper-hypocrisy is infecting American politics Republicans' mantra should have been 'Stop the Spread' MORE (R-S.C.) predicted Sunday on CBS’s “Face the Nation” that the House GOP tax plan “won’t get 10 votes in the Senate” as drafted.
With opposition against the tax growing, Speaker Paul RyanPaul Davis RyanJuan Williams: Pelosi shows her power Cheney takes shot at Trump: 'I like Republican presidents who win re-election' Cheney allies flock to her defense against Trump challenge MORE (R-Wis.) met with Senate Republicans last week to try to sell them on the plan. At that meeting, Ryan asked senators to “keep their powder dry” so that the House Ways and Means Committee can have time to hammer out the details of legislation.
Ryan says the border tax will help put American manufacturers on equal footing by bringing U.S. tax practices in line with the rest of the world.
“We are putting a bias against making things in America in the tax code,” Ryan said at a press conference last week. “That is why we think this is very important. This is good manufacturing policy.”
Ryan’s office touted the letter from the American Made Coalition Tuesday.
In addition to praising the border-adjustment tax, the CEOs also said in their letter that they support other parts of the House Republicans’ tax plan. The blueprint would lower rates, allow businesses to immediately write off the costs of their capital investments and move the U.S. toward a “territorial” tax system that doesn’t tax U.S. companies’ foreign earnings.
“These changes will free up much-needed capital for companies to invest here in the U.S., help stop corporate inversions and acquisitions of U.S. companies, and protect American jobs from unfair foreign competition,” the business leaders wrote.
During a press call on Tuesday, representatives of the American Made Coalition said that the House GOP tax plan, spearheaded by Ways and Means Committee Chairman Kevin BradyKevin Patrick BradyDemocratic retirements could make a tough midterm year even worse Yellen confident of minimum global corporate tax passage in Congress 136 countries agree to deal on global minimum tax MORE (R-Texas), is beneficial overall.
“Families under the Brady plan will be better off” and have increased purchasing power, said Brian Reardon, a former economic adviser to President George W. Bush.
McIlhenny Company CEO Tony Simmons, whose business makes Tabasco products, said his company imports most of the peppers it uses and exports about 40 percent of its total sales.
He said that the “border adjustment works both ways for us” and that overall the House GOP plan is beneficial. He praised the plan’s provisions to eliminate the estate tax and the alternative minimum tax.
For family businesses, “this would be a tremendous win,” Simmons said.
The CEOs urged Congress to enact tax-reform legislation to boost economic growth.
“Incremental tweaks will not level the playing field for American workers or dramatically reinvigorate economic growth,” they said in their letter. “If we miss this chance to fundamentally reshape the tax code, it might take another 30 years before we have another chance to try.”
The business leaders’ letter was sent to Ryan, House Minority Leader Nancy Pelosi (D-Calif.), Senate Majority Leader Mitch McConnellAddison (Mitch) Mitchell McConnellGOP blocks Senate Democrats' revised elections bill A politicized Supreme Court? That was the point The Hill's Morning Report - Presented by Uber - Democrats optimistic after Biden meetings MORE (R-Ky.) and Senate Minority Leader Charles SchumerChuck SchumerFixing Congress requires fixing how it legislates Beware the tea party of the left Bottom line MORE (D-N.Y.).
Updated 6:35 p.m.