Republicans Scrap Border Adjustment Tax Plan
Top Republicans driving the GOP tax reform effort have given up on border adjustment. The border adjustment proposal was a key revenue-raising plank of the plan House Republicans unveiled last year. It would have taxed imported products but let exports go untaxed. Retailers that get many of their products from overseas raised concerns about the proposal, saying it would ultimately result in them passing on the costs to consumers. Numerous senators also knocked the provision, leading to doubts in recent months that it could become part of a joint tax proposal.
Total Retail's Take: The vote on healthcare reform wasn't the only big news to come out of Washington yesterday. In a victory for retailers, the border adjustment tax (BAT) is off the table. The National Retail Federation (NRF) as well as top executives from leading retailers such as Wal-Mart, Target, Best Buy, Gap, and Walgreens were outspoken in their criticism of the BAT plan, saying it would result in price increases for consumers and a loss of jobs. With more product manufacturing being done overseas, particularly for apparel, retailers would have been left paying significantly more for their imports if the proposed 20 percent tax on such goods had been imposed.
