Target and ADM CEOs to Face Off in Congress Over Border Tax
- Author: Zachary Reyes May 25, 2017,
May 25, 2017, 12:23
For one, it appears the border tax, favored by House Speaker Paul Ryan (R-WI), is all but moot. Retailers have a lot to lose if the proposal becomes law: RBC Capital Markets Analyst Scot Ciccarelli found that the earnings risk to six major USA retailers could result in a $13 billion blow to their balance sheets, while Best Buy alone could see its annual earnings completely wiped out by such a tax. "Under the new border adjustment tax, American families - your constituents - would pay more".
"It's simple math", Cornell said.
Republican lawmakers including Jim Renacci of OH and Mike Kelly of Pennsylvania criticized the border-adjusted tax's potential impact on working Americans.
"It became apparent that there is a growing consensus in the administration that we must act soon to advance tax reform and BAT [the border adjustment tax] is seen as a major impediment".
Dimming the prospects more, lawmakers and lobbyists have begun to speculate that Congress will be unable to rally support for a sweeping tax code overhaul this year, and are beginning to look instead at cutting tax rates without broad reform.
"America's antiquated tax system may not be the only reason for this decline, but it clearly contributes", Luciano said. "The long-run benefits to the USA economy are many times any short-term costs involved in transition". He later said he worries about losing market share and competitiveness for US products. "Under BAT, the prices we pay... they go up". "There's just too much controversy". William Simon, former president and CEO of Walmart (WMT) U.S., took a neutral approach. To him, that amounts to a generous transition period that would phase in the tax for retailers and other businesses over a long period of time. "No, I can't", he said.
"[A border adjustment tax] improperly implemented ... will be very, very hurtful for the industry and the consumer", he said. "Right now the wind is coming out of retail sales because the wind is coming out of the middle class". Chief Executive Officer Brian Cornell, who's been fighting along with other retailers and import-heavy industries to kill the proposal.
"Do we really want to bet large sectors of the economy on this idea?" "Trade disputes of this magnitude generate uncertainty and an unstable investing environment". "We oppose the Border Adjustment Tax as it will have a disproportionately negative impact on Florida's retailers, putting thousands of Floridians' businesses and jobs at risk".
Still, it's hard to declare the border tax idea totally dead.
Echoing the argument of retailers, Rep. Mike Kelly (R-Pa.) said his concern "is the final price on the shelf for those folks that pick up the tab on every single thing this wonderful government does in their name". "I think what you heard today, even among a lot of the Republican members, is not a lot of confidence in this position", he said.
While Congressman Lloyd Doggett (D-TX) characterized the proposal as being "on life support", retail trade organizations and executives know the war hasn't been won quite yet.
Cornell on Tuesday called it an "unproven and untested" theory. But some criticized the proposed border-adjustment tax included in the Republican tax reform blueprint. Elsewhere in Washington, Treasury Secretary Steven Mnuchin said the administration has doubts about the measure's ability to level the playing field.
"Tax reform is a process", Brady said.
"The retail industry has been a strong proponent of income tax reform", French adds.