House panel to examine border tax next week
The House Ways and Means Committee will hold a hearing next week that will focus in part on the controversial border-adjustment tax provision in Speaker Paul Ryan’s (R-Wis.) tax plan.
The May 23 hearing, titled “Increasing U.S. Competitiveness and Preventing American Jobs from Moving Overseas,” will be part of a series of tax-reform hearings that the Ways and Means Committee is kicking off on Thursday.
Committee Chairman Kevin Brady (R-Texas) told reporters Tuesday that a “key element” of next week’s hearing will be “border adjustment and the role that it plays as crucial element in tax reform to level the playing field for ‘Made in America’ products here and abroad.”
The border-adjustment proposal would tax imports and exempt exports and was a part of the tax-reform blueprint that Ryan released last year. Ryan and Brady have defended the proposal as a way to remove incentives for companies to move their jobs and headquarters overseas.
But the proposal has drawn concerns from other GOP lawmakers, including several Ways and Means Committee members. And Senate Majority Leader Mitch McConnell (R-Ky.) said Tuesday that the provision “probably wouldn’t pass the Senate.”
When asked about McConnell’s comments, Brady told reporters that his committee has been working on new approaches and designs to the border-adjustment tax “that we’ll bring to the table.”
The Ways and Means Committee is expected to hold several tax-reform hearings in the coming weeks, as congressional Republicans and the White House work to develop a proposal that they can all get behind. On Thursday, the panel will start those hearings with a meeting about tax reform’s impact on economic growth.
The retail industry has been intensely lobbying agains the border adjustment proposal, arguing that it would lead to higher prices for consumers.
A group of retailers, including officials from AutoZone, Ikea and JC Penny, met with Treasury Secretary Steven Mnuchin on Tuesday. Retailers also met with several House GOP lawmakers.
During the meeting with Mnuchin, which was organized by the Retail Industry Leaders Association, the retail leaders stressed that they believe tax reform is important but have concerns about the border adjustment tax. They expressed a “strong desire” to work with the administration on a tax bill that excludes the import-tax proposal, according to a person who attended the meeting.
Mnuchin understood the retailers’ concerns about the border adjustment tax and was “generous with his time and engaged in the conversation,” the attendee said.
Publicly, Mnuchin has said that the administration has concerns about the border-tax proposal but is having conversations with lawmakers about possible modifications.
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