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The Hill: CEOs praise House GOP border tax proposal

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Washington, February 17, 2017 | comments

A group of chief executive officers are praising House Republicans' proposed border-adjustment tax as the debate escalates.

Border adjustability, which would subject imports to U.S. tax and exempt exports "is consistent with the tax policies of nearly every other country in the world, and it would effectively end the 'Made in America' tax that creates an unfair advantage for foreign-based companies at the expense of U.S. jobs and economic growth," the CEOs wrote in a letter to congressional leaders Tuesday.

Sixteen business leaders signed the letter, including the CEOs of Boeing, GE, McIlhenny Company, Pfizer and S&P Global. The chief executives' businesses are members of the American Made Coalition, a group thatlaunched earlier this month to support the border-adjustment tax.

The border-adjustment proposal is a key part of the House Republicans' tax-reform blueprint, which is serving as the starting point for legislation that the House Ways and Means Committee is writing.

House Republican leaders have been fiercely defending the proposal, and the office of Speaker Paul Ryan (R-Wis.) on Tuesday touted the CEOs' letter. House GOP leaders have been arguing that the border-adjustment tax removes incentives for businesses to move jobs overseas. The proposal would also raise more than $1 trillion that could be used to help pay for tax cuts.

However, a number of GOP lawmakers and business groups have come out against the proposal, saying it would increase the prices of consumer goods. Sen. Lindsey Graham (R-S.C.) said on CBS's "Face the Nation" on Sunday that the House GOP tax plan "won’t get 10 votes in the Senate.”

In addition to praising the border-adjustment tax, the CEOs also said in their letter that they support other parts of the House Republicans' tax plan. The blueprint would lower rates, allow businesses to immediately write off the costs of their capital investments, and move the U.S. toward a "territorial" tax system that doesn't tax U.S. companies' foreign earnings.

"These changes will free up much-needed capital for companies to invest here in the U.S., help stop corporate inversions and acquisitions of U.S. companies, and protect American jobs from unfair foreign competition," the business leaders said.

During a press call on Tuesday, representatives of the American Made Coalition said that the House GOP tax plan, spearheaded by Ways and Means Chairman Kevin Brady (R-Texas), is beneficial overall.

“Families under the Brady plan will be better off" and have increased purchasing power, said Brian Reardon, a former economic adviser to President George W. Bush.

McIlhenny Company CEO Tony Simmons, whose business makes Tobasco products, said his company both imports most of the peppers it uses and exports about 40 percent of its total sales.

He said that the "border adjustment works both ways for us" and that overall the House GOP plan is beneficial. He praised the blueprint's provisions to eliminate the estate tax and the alternative minimum tax.

For family businesses, “this would be a tremendous win,” Simmons said.

The CEOs urged Congress to enact tax-reform legislation to boost economic growth.

"Incremental tweaks will not level the playing field for American workers or dramatically reinvigorate economic growth," they said in their letter. "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 business leaders' letter was sent to Ryan (R-Wis.), House Minority Leader Nancy Pelosi (D-Calif.), Senate Majority Leader Mitch McConnell (R-Ky.) and Senate Minority Leader Chuck Schumer (D-N.Y.).

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