U.S. House tax chief: lower tax rates vulnerable without border adjustment

1 Lawyer

#1 Lawyer Network

1 Legal - 1 Lawyers - 1 Attorneys

Injury Lawyer - Criminal - Foreclosure - Divorce

 

By David Morgan

<span class="articleLocation”>A leading Republican lawmaker warned on Tuesday
that Congress will not be able to lower the U.S. corporate tax
rate to the 15 to 20 percent range sought by President Donald
Trump unless a controversial “border adjustment” proposal
remains part of tax reform.

The proposal, known as border adjustability, represents a
dramatic departure from current U.S. policy. It would exempt
export revenues from taxation but impose a 20 percent tax on
imports.

Escalating the war of words over a measure opposed by
retailers, oil refiners and automakers, House Ways and Means
Committee Chairman Kevin Brady said there would be “severe
consequences” for tax reform, U.S. competition and Trump’s job
creation goals if special interests succeed in blocking border
adjustability.

“Tax rates on businesses would have to increase
significantly from the proposed 15 percent and 20 percent rates,
undercutting our ability to make America competitive again,” the
Texas Republican told the U.S. Chamber of Commerce.

Brady was speaking a day after Trump said his administration
is trying to get the current 35 percent corporate tax rate down
to between the 15 percent rate he has proposed and the 20
percent rate contained in the tax reform blueprint unveiled last
June by Brady and House Speaker Paul Ryan.

Analysts say Trump could have trouble getting the rate much
below 30 percent without border adjustability.

The provision would also go far to pay for lower tax rates
by raising more than $1 trillion in revenues over a decade,
according to independent analysts.

House Republicans have billed the provision as a way to
attract foreign investment and keep U.S. companies and jobs from
moving overseas.

“This is something that we think is clearly going to get our
system re-set so that American jobs and American
businesses and American companies stay in this country,” Ryan
told reporters.

But it has powerful adversaries including billionaire
industrialists Charles and David Koch, who spend heavily to
support Republican candidates and conservative policies.

Trump himself poured cold water on the proposal in a recent
Wall Street Journal interview, calling it “too complicated” and
worrying that it would result in “a bad deal” for America.

Critics claim the measure would raise consumer prices for
goods from apparel and electronics to gasoline, while
potentially violating international trade rules.

House Republicans say the measure would neutralize higher
import costs by strengthening the dollar and insist that it
would pass muster with trade authorities.



1 Lawyers
1 Lawyers

1 Legal

#1 Lawyers Search Engine

1 Legal is part of the 1 Search Project

Practice Areas - News - Federal - State - Contact Us


1 Lawyer

#1 Lawyer Network

1 Legal - 1 Lawyers - 1 Attorneys

Injury Lawyer - Criminal - Foreclosure - Divorce

 

Leave a Reply