In a classic case of follow the money, over 100 companies have joined Americans for Affordable Products, a newly-created organization formed to build efforts against institution of import taxes. The organization is a response to chatter coming from the Republican congress and Donald Trump around instituting border adjustment taxes.
Leaving aside Trump’s claim of creating a tariff on imported goods from Mexico to pay for a border wall, Republican leadership is seriously mulling the institution of a tax system that would benefit U.S. companies that export most of their goods and seriously punish multi-national corporations who important most of their goods. A good example is U.S. based company like Nike. Because it imports a ton of product made in Asian countries, it would end up being taxed at a higher rate under the new tax codes.
Prominent apparel and footwear brands and retailers part of the coalition include Nike, LVMH, Birkenstock, Clarks, Dick’s Sporting Goods, Gap, Ikea, Levi’s, Kohls, Macy’s, Saks Fifth Avenue, Target, Toms and Walmart, among many others.
A statement on the organization’s website reads as follows:
“The Border Adjustment Tax, under consideration in Congress today, slaps outrageous taxes on imported goods—like clothing, food, medicine, and gasoline—products Americans rely on every day. Under the BAT, a U.S. large company may virtually pay no corporate taxes simply because it exports products, while another American company delivering affordable essentials to their consumers will be faced with crushing taxes simply because many of these essentials must be imported. This means higher prices for everyday goods that Americans purchase, and taxpayer subsidies for products sold abroad. The Border Adjustment Tax is a trillion-dollar tax break for a few corporations and a $1,700 bill for ordinary household expenses delivered to the address of every hardworking American family.”
At the moment, there isn’t an actual bill on the table, though there is Senator Paul Ryan and Kevin Brady’s 2016 “Blueprint for Tax Reform,” and that combined with a batshit crazy president whose viewpoints on these matters seems to change with the wind and whoever he’s mad at that day, big business is not taking any chances on what would happen to their U.S. business if they had to raise prices 20 percent.
Border image image via Tomás Castelazo.