- The Washington Times - Tuesday, February 21, 2017

Tim Phillips, the president of Americans for Prosperity, said Tuesday the so-called “border adjustment tax” being pushed by congressional Republicans would be a “devastating tax increase” and is something that could “absolutely” derail broader tax reform this year.

“It is a big issue, and it’s one that’s a priority for us. It would be devastating — a devastating tax increase,” Mr. Phillips told The Washington Times. “I don’t think Republicans are going to want to go home and defend a tax that in the end [will] be passed along to American consumers so directly as this.”

The proposal being pushed by some congressional Republicans would impose a new tax on imports to raise about $1 trillion over a decade. Proponents say it’s intended to help level the import/export playing field by incentivizing companies to manufacture more products in the United States.

Sixteen CEOs — including the bosses of Boeing, General Electric, Raytheon, and Pfizer — on Tuesday sent a letter to congressional leaders urging them to end what they called the “Made in America” tax “that creates an unfair advantage for foreign-based companies at the expense of U.S. jobs and economic growth.”

“If we miss this chance to fundamentally reshape the tax code, it might take another 30 years before we have another chance to try,” the CEOs wrote.

But Mr. Phillips said the tax amounted to “protectionism” and that it will hit people on fixed incomes the hardest.

“That’s a big issue, and it’s one that could absolutely derail tax reform, for sure, which we need so badly,” he said.

Mr. Phillips did say they are encouraged about other GOP priorities such as cutting the corporate rate, lowering and flattening individual rates, and pushing down the repatriation rate.

But without a revenue-generator like the border adjustment tax, it will be extremely difficult for Republicans to pass broader tax reform this year, assuming no Democrats go along with it.

At least two Republican senators — Tom Cotton of Arkansas and David Perdue of Georgia — have expressed skepticism about the tax, making the issue precariously close to flopping in a chamber where the GOP has an effective 52-48 majority.

The issue has sparked one of the biggest behind-the-scenes battles within the GOP, even as the party works through how it plans to repeal and replace Obamacare.

President Trump said last month that the idea sounded too complicated. White House spokesman Sean Spicer later said a 20 percent tax on imports from countries like Mexico could be used to pay for a U.S.-Mexico border wall, before clarifying that such a tax would be just one funding possibility.

• David Sherfinski can be reached at dsherfinski@washingtontimes.com.

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