Kevin Brady — Chairman of the House Committee on Ways and Means — asserted that he’s standing by the border adjustment language in the House GOP’s “A Better Way” blueprint for tax reform.
While the White House said it is weighing options for how to best address corporate tax reform, Brady stressed the importance of the contested provision, arguing it eliminates any tax incentives companies might have to move business abroad.
“I’m more supportive than ever, because this tax has a simple but powerful principle — which is every product and service that is consumed in the United States will have the equal business tax rate of 20 percent,” he told reporters Monday. “That not only levels the playing field between our foreign competitors in America, it gives our made in America products a fighting chance both here and abroad.”
The border adjustability language calls for taxing imports while exempting exports, generating an estimated $1 trillion or more in revenue over the next decade, according the Tax Foundation — a critical component in keeping House Republican plans to cut taxes “revenue neutral.”
Brady said that America’s competitors have been using a similar system, which has put the United States at a disadvantage.
“The more Americans understand that our businesses are competing with one had tied behind their back, the more support this provision will generate,” the chairman explained.
The Trump administration alternatively floats the idea of a border tariff, which would allow the tax to be targeted to a specific country, product or service coming in from abroad. Brady said equal taxation will help the United States become more competitive — leading to increased investment and job growth domestically.
“Equal taxation of products and services in the United States for the first time at that business tax rate (20 percent) is critical, who can argue against taxing products equally?” he said.
According to Brady, his colleagues in the upper chamber are receptive to the proposal and likely to get on board.
“We had a very positive feedback from them, their learning about the different elements of the blueprint — I think that they were pleasantly surprised to learn that the blueprint not only incorporates ideas from 50 lawmakers in the House but nearly two dozen senators as well,” he said. “So my takeaway, and I think there’s was, is not only do we share goals, in many cases we share solutions to tax reform and that’s a good base to grow off of.”
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