Former Speaker Newt Gingrich (R-Ga.) on Thursday praised the House Republicans' border-adjustment tax proposal, saying it would encourage companies to create factories and jobs in the United States.
"The first major step Congress should take is to reform the tax system so companies are incentivized to invest and build factories in the United States and create good-paying jobs," Gingrich said in an op-ed published on the Fox News website. "Speaker Paul RyanPaul Davis RyanHow Kevin McCarthy sold his soul to Donald Trump On The Trail: Retirements offer window into House Democratic mood Stopping the next insurrection MORE [R-Wis.] has a plan that will do these things through a border adjustment tax, which is the right first step toward tax reform."
The border-adjustment proposal would subject imports to U.S. taxes and exempt exports. House Republican leaders view the provision as a key part of their tax reform blueprint and argue that it would level the playing field for American-made goods. But a number of retailers and GOP senators have raised concerns about the proposal because they believe it would lead to higher consumer prices.
Gingrich said he recently met with a group of investors who "expressed tremendous support for a border adjustment tax."
The former Speaker said that the "current tax system is essentially designed to drive production out of the United States" and that a border-adjustment tax would make the U.S. tax system more similar to the tax systems in other countries.
"With a border adjustment tax, we would tax imports – just like more than 160 other countries that have either a value-added tax on imports, a border adjustment tax, or both," he said.
Gingrich called tax reform "the key to President Trump's success."
"Tax reform will provide the boost in jobs and production President Trump and Republicans in Congress need to build legislative momentum and implement the president’s infrastructure plan," he said. "Republicans will then be able to move from a clear position of strength as they deliberately and methodically rebuild our health care system."
Trump recently said that the plan could be a job creator.
"I certainly support a form of tax on the border because everybody else does," he told Reuters in late February. "We’re the only country, we’re one of the very few countries, possibly the only country, that has no border tax."