House GOP, Trump At Odds Over Border Adjustment Proposal

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Juliegrace Brufke Capitol Hill Reporter
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House Republicans are standing by their tax blueprint despite President-elect Donald Trump’s criticisms over its border adjustment language.

Proponents of border tax adjustment, which would tax imports while exempting exports, argue it makes the United States more competitive in the world marketplace while incentivizing companies to produce their goods domestically. The provision, which is a key element in the GOP’s “A Better Way” proposal on corporate tax reform, would generate $1.1 trillion in revenues over the course of a decade, according to the Tax Foundation.

“Unfortunately our current tax code is not only complex, it favors Chinese steel over American steel, Mexican beef and autos over American beef and autos, and foreign oil over American oil,” House Ways and Means Committee Chairman Kevin Brady told The Hill in a statement Tuesday. “It’s time to tax imports and exports equally in America, and end the ‘Made in America’ export tax.”

Despite Republican lawmakers’ assertions that border adjustment will increase economic growth, Trump appears to be set on his plan to move forward with a 35 percent tax on companies producing their good outside the country.

According to Trump — who ran on the promise to keep manufacturing jobs in the U.S. — the House proposal is “too complicated.”

“Anytime I hear border adjustment, I don’t love it,” he told The Wall Street Journal. “Because usually it means we’re going to get adjusted into a bad deal. That’s what happens.”

While the GOP members of Congress and Trump may be at odds over the border adjustment provision, their plans largely align.

Both proposals call for lowering the corporate tax rate, which could alleviate part of the country’s problem with corporate inversions.

Brady has repeatedly said the committee looks forward to working with the Trump administration on constructing pro-growth policies.

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