The Retail Industry Leaders Association (RILA) spoke out against a proposed border adjustment tax, claiming it would lead to higher prices for consumers.
The border adjustment tax (BAT) was proposed last June by Republicans on the House Ways and Means Committee as part of their tax reform blueprint. The BAT would modify the tax code to require companies that sell products in the United States that are produced overseas to pay an income tax. U.S. companies that produce products that are sold overseas would also not have to pay an income tax, because the products are not sold in the United States.
The income tax would apply to products made and sold in the United States as well as products imported from overseas and sold here. Currently, only companies that make and sell a product overseas must pay income tax.
Opponents, including RILA, said the BAT would lead to higher prices for consumers on imported goods.
“Pro-growth tax reform is the top priority for retailers and it can and should be accomplished without saddling American families with the higher prices that the border adjustment tax will create. Comprehensive tax reform should ease the pressures on family budgets, not burden them further,” Brian Dodge, RILA’s senior executive vice president for public affairs, said.
RILA represents more than 200 retailers and more than 100,000 stores in the United States and abroad.
“We will continue to educate lawmakers about the harmful effects of this ill-conceived proposal and work with its many skeptics to achieve pro-growth tax reform,” Dodge said.
The statement was issued following comments made by American Action Forum president and border adjustable tax supporter, Doug Holtz-Eakin, on March 3.
“Tax reform is a route to better economic growth. It can produce better investment, cement the U.S. as a low tax jurisdiction in the globe. And all of those things can happen with or without the adjustment at the border,” Holtz-Eakin said.
In February, CEOs from seven major retailers – including Target, JC Penney, Best Buy, Joanne Fabrics, Gap, Autozone, and Tract Supply Co. – lobbied against the BAT before the House Ways and Means Committee.