Border Adjustment Tax (BAT) Update

Border Adjustment Tax (BAT) Update

There has been a lot of talk in the news lately that the House Republican proposal to include a “border adjustment tax” (BAT) as part of any tax reform effort is dead.

Earlier this month, House Ways & Means Committee Chairman Kevin Bray (R-TX) proposed phasing-in a border adjustment tax (BAT) over five years, instead of immediate implementation as proposed in the House Republican “A Better Way” tax reform proposal. Thankfully, Brady’s phase-in approach failed to gain new support for the proposal. However, it appears opposition to the TGA-opposed BAT proposal continues to grow.

Regrettably, key Congressional leaders continue to keep the concept of the BAT alive.

Why? Because Congressional Republicans, and the White House, want any tax reform they approve to be permanent, like the Ronald Reagan tax reform of 1986, not temporary, like the Bush tax cuts in the 1990s. In order to make tax reform permanent, Congress must find a way to pay for it.

Lowering the corporate tax rate from 35 percent to 15 or 20 percent, as both the White House and Congressional Republicans have proposed, means over a trillion dollars in lost revenue for the U.S. government over the next decade. Eliminating key exemptions, as proposed by the White House, will only recoup a portion of this lost revenue.

However, the BAT, as currently envisioned, would raise over $1.2 trillion in revenue for the U.S. government over the next ten years. That revenue is really hard to give up if you want to make 15 or 20 percent corporate tax rates the new norm, which is why BAT is not dead yet.

And that is why we need you to keep up the pressure on Congress to kill the BAT. Here are ways you can help:

  • Join more than 14,000 executives, including members of TGA and other affected industries, and send a letter to your members of Congress to show your opposition to tax reform that includes a BAT (it only takes a few minutes); Get all of your colleagues to also send an email; and
  • Continue to voice your opposition in meetings with Members of Congress, and share our handout showing the potential impact on our industry.

For more information, please contact Nate Herman, TGA’s Director of Government Relations, at 202-853-9351,