Retailers oppose Trump border tax in White House meeting
Feb 17 2017 by Johnny Bowman
In the hourlong meeting, heads of eight retailers, including Target CEO Brian Cornell, Best Buy's Hubert Joly, Gap's Art Peck and JCPenney's Marvin Ellison, talked with Trump about jobs and the industry's impact on the broader economy, according to Retail Industry Leaders Association (RILA), the trade group that organized Wednesday's meeting.
The Koch brothers have a long history of supporting Republicans.
The problem with these ideas is that they have been tried: Base-broadening tax reform has been something of a non-starter because it preserves numerous same problems in the current tax system; few loopholes are likely to be closed and the incentive to hoard money overseas remains.
The White House has given mixed signals on whether the president supports the border adjustment tax. Companies that rely heavily on imports, such as retailers, automakers and refiners say a border tax will outweigh the benefit of a lower headline corporate tax.
Brady and Speaker Paul Ryan are leading a House Republican push that would cut corporate income tax to 20 percent from 35 percent, exclude export revenue from taxable income and impose a 20 percent tax on imports.
Economists say not to worry, because the US dollar DXY, -0.60% will appreciate by more than 20% and so reduce the effective price of imports. Exports, however, will be exempted from such tax.
Proponents of the tax say importers shouldn't fear the plan because the dollar will strengthen under this new tax, easing their losses.
As expected, one of the key discussion points was border-adjustment tax.
Additionally, Brady said it's important to get money into people's pockets and to American businesses, in an effort to stimulate the USA economy.
Before the election, Trump put forth a broad tax plan and then a narrower plan.
Calling the proposal "a consumer tax" that "picks winners and losers", Phillips said the proposal would hurt those who can least afford a tax increase. "It will increase the cost of everything consumers buy".
While no specifics from the conversation were offered, the Americans for Affordable Products-which is a coalition of more than 100 companies opposed to the border tax-said, "Today's meeting between executives and President Trump focused on pressing issues confronting American families: economic growth and domestic investment...."
Brady co-authored the blueprint that would require US retailers who now pay taxes only on the profit made from the sale of an imported product to also pay taxes on what it cost to buy it from overseas. The dollar might appreciate just enough that imports and exports end up costing the same as they did before the tax.
"We're doing a massive tax plan; it's coming along really well", Trump said at Wednesday's meeting, giving few details other than to say it would simplify the tax code and would "lower the rates very, very substantially for virtually everybody in every category, including personal and business".