A key element of the Republican blueprint for tax reform is facing strong headwinds from business leaders, members of the Trump administration and the president himself.
These concerns are a “serious blow” to the proposed border adjustment tax (BAT), which needs GOP and White House support to be included in a tax bill, said Shawn McBurney, the Society of American Florists’ senior director of Government Relations.
During SAF’s Congressional Action Days in March, floral industry members asked Congress to exempt imported agricultural floral products from the BAT. Since that time, the future of the tax has only become less certain.
“Given the partisan divide in Washington, Democrats clearly would be opposed to the Republican proposal,” McBurney explained. “However, it isn’t just Democrats that have expressed concerns with the BAT. Several Republicans, including some on the House tax writing committee, are openly critical as well.”
McBurney noted that on May 23, the House Ways and Means Committee held a hearing on tax reform that became an open debate on the BAT.
“I know we have to pay for these tax cuts, but I don’t want it to be on the backs of everyday hardworking American taxpayers,” said Rep. Mike Kelly (R-Pennsylvania) during the hearing.
Rep. Erik Paulsen (R-MN) stated he “cannot support the border adjustability provisions as introduced last year in the blueprint.”
Several key senators have expressed their opposition to the BAT even before any legislation has been sent to them by the House.
The BAT provision is key to the GOP’s goal of simplifying the tax code and reducing tax rates because it will raise federal tax revenue to offset tax revenue reductions caused by those lower rates.
“Although House Speaker Paul Ryan and Ways and Means Chairman Kevin Brady continue to express their strong support of BAT, increasing divisions between Republican members of Congress mean the provision may be scrapped, forcing an entirely new approach to tax reform,” McBurney said.