TGA Announces Opposition to Border Adjustment Tax Even as Trump and House Republicans Continue to Push It
TGA Announces Opposition to Border Adjustment Tax Even as Trump and House Republicans Continue to Push It
House Republicans continue to push the Border Adjustment Tax (BAT) as part of their “A Better Way” corporate tax reform proposal. Recently, President Trump has made cryptic signals of support, although Trump’s Press Secretary has conflated the BAT with a border tariff describing Trump’s support. Under the House Republican proposal, corporate tax rates would drop from 37.5% to 20%. However, to help cover the loss in revenue, the House proposal would also impose a Border Adjustment Tax. Under BAT (BAT explained – Example 1, Example 2), imported materials and products would no longer be allowed to be deducted as part of a company’s Cost of Goods Sold (COGS). As a result, with 99% of travel goods sold in the U.S. being imported, a travel goods company’s tax base would increase dramatically under the proposal, even as the tax rate they pay on that base declines. For many companies, that means the resulting tax bill would be 3-4 times their current tax bill, in many cases, more than their profit (estimate your new tax here). As a result, TGA has joined large swaths of the U.S. business community in the new Border Adjustment Tax (BAT) Coalition to strongly oppose the BAT proposal. Congress is expected to consider corporate tax reform later this year. We need you to speak up. Click here to tell your members of Congress to oppose the BAT proposal.