Congress holds hearings on import tax hike

WASHINGTON — A proposed 20 percent tax on imported goods championed by House Speaker Paul Ryan, RWis., as a way to overhaul the nation’s tax system received a hearing on Capitol Hill on Tuesday, and reception to the plan by business leaders and House Republicans was mixed.

The tax on imports, dubbed the border adjustment tax, has divided Republicans. Proponents argue the tax would help American manufacturers while raising $1 trillion over 10 years, and opponents say the plan would result in higher prices for consumers and cause businesses to lay off workers.

Senate Republicans, including Majority Leader Mitch McConnell of Kentucky, have said the border adjustment plan doesn’t have a chance of passing the Senate, while the White House has remained relatively silent over the proposal in recent weeks.

On Tuesday, the CEO of Target testified against the idea to the House tax-writing committee, as many large retailers are leery of a tax on the thousands of products they import from foreign markets.

“Under the new border adjustment tax, American families — your constituents — would pay more so many multinational corporations can pay even less,” said Target CEO Brian Cornell. “Eightyfive percent of Americans shop at Target every year. We believe this new tax would hit those families hard, raising prices on everyday essentials by up to 20 percent.”

But the former chief executive officer of Wal-Mart was cautiously optimistic. “I have weighed the considerable challenges this proposal presents to retail with the significant benefits it will deliver to the economy as a whole and have concluded that properly implemented, it is in the best interest of our country for this to be considered,” William Simon said.

Simon retired in 2014, and Wal-Mart is opposed to the border adjustment plan.

A few Republicans on the House Ways and Means Committee voiced reservations to the tax Tuesday. Minnesota Rep. Erik Paulsen, who represents a competitive district and did not vote for President Donald Trump, said he was opposed to the border adjustment tax.

“This has to be done in a very thoughtful way, a way that addresses the very real and valid concerns,” Paulsen said. “I cannot support the border adjustability provisions as introduced last year in the blueprint. I really want to urge this committee to listen, to be educated and to address these concerns that we heard.”

Other Republicans on the committee, including Reps. Mike Kelly of Pennsylvania and Jim Renacci of Ohio, pushed Cornell and Simon over the implications of the tax for consumers.

“I’ve been skeptical of the border adjustment as a central element of the blueprint, but I’m trying not to be,” Renacci said. “Does border adjustment pick winners and losers? Who will the tax burden ultimately shift to, and is it compliant with our international treaty obligations?”