The Tax Times: Ryan’s Border Tax Shaky as Trump Ponders Overhaul Plan

Tuesday, April 4, 2017

Ryan’s Border Tax Shaky as Trump Ponders Overhaul Plan

We previously posted on March 24, 2017 Breaking News - Possibly No Tax Reform This Year! where we discussed that Warren Payne, a former House Ways and Means Committee policy director now with Mayer Brown LLP, believes that passing tax reform by August will be ‘‘impossible’’ this year. Rather, he suggested during a conference call March 16 that it is more likely to be addressed in early 2018. We also posted on March 30, 2017 Possible Phase In of Any Potential Border Tax Plan where we discussed that House
Republicans may be bending to political pressure over their most controversial proposal to revamp tax laws, with the leader of the chief tax-writing committee in the House of Representatives saying Wednesday that he is “contemplating significant modifications” to the border-adjusted tax plan.

Now according to Bloomberg Donald Trump’s surprising election and his promise to overhaul the U.S. tax code set off celebrations across corporate America, but some industries had barely applauded before they began gearing up for a fight.

Trump’s win gave Republicans control of the U.S. government for the first time in a decade and quickly drew attention to a tax plan that House Speaker Paul Ryan unveiled last summer with little fanfare. Ryan’s radical tax-code rewrite would replace the corporate income tax with a 20 percent tax on businesses’ domestic sales and imports; their exports would be exempt.

Cue the alarm bells for import-heavy companies like Wal-Mart Stores Inc., Target Corp. and Nike Inc. Retailers, apparel-makers, shoemakers, automakers and others unleashed one of their most robust lobbying and public-relations pushes in recent memory against the so-called “border-adjusted” tax.

Buttressed by more than 10,000 phone calls to congressional offices, by a parody-style TV ad that aired during “Saturday Night Live” and by a succession of Republicans who’ve expressed concern about the plan, the opponents’ efforts appear to be winning. So far.

But the action has now shifted to the White House, which will be “driving the train” on tax legislation, Press Secretary Sean Spicer says. There, the picture gets cloudier; lobbyists on both sides of the border-adjustment tax issue say they’re not sure who’ll determine the final contents of the administration’s plan.

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