House Speaker Paul Ryan continues to promote a tax reform plan that would establish a border adjustment tax (BAT), despite suggestions by the White House that such a proposal would not be warmly received, Politico reported Monday.
Supporters of the BAT point to the substantial revenue it would bring in, estimated at $1 trillion over a decade. It is a tax levied on imported goods that also allows businesses to shield exports from taxation.
Ryan, who has called the tax "the smart way to go," has enlisted the help of House Ways and Means Chairman Kevin Brady, R-Texas, to help sell the plan to lawmakers.
White House officials, including Treasury Secretary Steven Mnuchin and chief economic adviser Gary Cohn, have hinted they were not enthusiastic about the BAT, and Senate Majority Leader Mitch McConnell has previously maintained it would be a challenge to get it approved by the Senate.
President Donald Trump has called the tax "too complicated," but also indicated he was open to the idea.
A memo of talking points from the Ways and Means Committee was circulated among House lawmakers ahead of a hearing on the issue scheduled for Tuesday. The document encouraged support of the BAT because it "helps American workers and job creators."
"Our current tax code favors foreign workers and products over American workers and products. It puts special interests before the best interests of hardworking American families," the talking points read. "By eliminating the "Made in America" tax, our Blueprint ends the penalty on work that's done in the U.S. — and stops rewarding work that's outsourced to other countries."
One consequence of the tax would be to end the flow of businesses outsourcing their operations to other countries due to cheaper costs. Leaders of many large businesses argued that added costs to them due to the tax would be passed on, resulting in higher prices for nearly all consumer goods.
Nevertheless, Ryan pushes ahead with the idea, even though many Republicans are wary of a BAT. Brady told reporters last week the proposal could evolve.
"Tax reform is a process," Brady said. "And so, I'll continue to bring to the table our solutions on how to address that challenge in the current tax code."
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