Cable news producers pulled into border tax fight

Cable news producers pulled into border tax fight
© The Hill staff

The battle over a tax proposal from House Republicans is spilling over into the airwaves.

A coalition of retailers that opposes the House Republicans' border-adjustment proposal is pushing questions to cable television producers and bookers. They want them to ask companies that support the GOP measure whether they would end up paying no taxes under it.

The request, which is being made by Americans for Affordable Products (AAP), comes as the border-adjustment tax has been the focus of intense lobbying in recent weeks.

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Border adjustability, which would subject imports to U.S. tax while exempting exports, is a key part of the tax plan from House Republicans; it would raise revenue to pay for lowering tax rates.

Companies in a group called the American Made Coalition — including Boeing, GE and Eli Lilly — support the proposal, saying it would end the disadvantage that American-made products have over foreign-made goods.

The retail industry, represented by AAP, argues that the proposal would lead to higher prices for consumers. 

In a memo Monday addressed to TV producers and bookers, AAP said that the leaders of businesses in the American Made Coalition already pay low effective tax rates and could pay even less if the border-adjustment proposal were enacted.

"Chief executives associated with the American Made Coalition have made clear they support a Border Adjustment Tax (BAT) to pay for comprehensive tax reform that lowers rates," AAP said. "But as they argue in favor of the BAT to lower rates, American Made Coalition members aren’t telling Americans about the current tax rates they pay — often significantly lower than the 35 percent rate which is frequently cited as the need for tax reform."

AAP also cited a Morgan Stanley analysis that found that under a border-adjustment tax, it's possible that a profitable company that is a net exporter could end up having no taxable income for an indefinite amount of time.

In the memo, AAP asked cable TV producers to ask border-tax supporters why they now pay effective tax rates that are lower than 35 percent. The coalition also suggested that American Made Coalition members be asked what they think their taxes would be under the border-adjustment proposal.

Additionally, AAP urged producers to ask American Made Coalition members if it would be beneficial for Congress to cut the corporate tax rate and move to a "territorial" tax system that doesn't tax U.S. companies' foreign earnings. AAP pointed to commentators that recommended Congress make those changes without including border adjustability.

"We would respectfully urge producers and bookers — particularly on financial cable networks — to consider these questions and arguments as supporters of the BAT conduct interviews on their programs," AAP said.

The attempt to shape news coverage of the border adjustment proposal shows just how heated the lobbying around the issue has become.

John Gentzel, a spokesman for the American Made Coalition, said that his group is working to achieve tax reform that helps American companies.

“Proponents of our broken status quo tax policies are ignoring the overwhelming number of Americans who want a tax code that incentivizes domestic manufacturing, investment in U.S. businesses and, above all, unwavering support for American workers," he said in a statement.

"While the opposition is content with policies that promote foreign-made products over U.S. jobs, our coalition is working toward a comprehensive update to the tax code that levels the playing field for all American businesses.”

The American Made Coalition released a poll on Monday that found that 58 percent of registered voters supported the border-adjustability tax, while 29 percent were opposed.