Border Tax is Not the Solution

By Representative Jack Williams

Every two years, candidates from both political parties run for Congress vowing to protect and defend the middle class. Sure enough, it was on that message that the middle class helped elect Donald Trump and maintained a Republican majority in the U.S. House and Senate.

Now Republicans are trying to make good on their promise to aid the middle class by reducing taxes across the board and lowering the highest corporate tax rate (35%) in the world. That can only be good for consumers, thus the middle class. That is a given.

However, because of the fact that the Republicans do not have the votes to stop a certain filibuster, the only opportunity to pass meaningful legislation is to make use of Senate procedural process called “reconciliation,” thus allowing a simple 51-vote majority for passage of a budget. Under reconciliation, for the reforms or tax cuts to be sustained after ten years, they have the make certain that any tax cuts or other reforms balance the budget after a ten year “budget window.” Otherwise, the tax cuts will face the constant push for reauthorization or go away much like the George W. Bush cuts of the early 2000’s were eliminated.

So, some lawmakers are proposing this concept of a Border Adjustment Tax (BAT) to “offset” the other tax cuts proposed.

This is a terrible idea.

First, a BAT is little more than a tariff that will be levied on all imports. It calls for a 20 percent tax on all imported goods, increasing the costs of nearly everything we buy – from food and medicine to clothing and gasoline. As such it will be devastating to the economy of Alabama, our ports, small business, retailers, auto manufacturers, grocers many manufacturers and ultimately our consumers. It will punish the middle class.

For the life of me I can’t understand why congressional leaders would create an entirely new tax to justify the reduction of existing taxes.

If Republicans in Washington are serious about actually reducing the tax burden of the middle class and satisfying the Senate rules of reconciliation, why not look at reducing spending and regulatory burden on small business? It makes no sense to tax small business and consumers to reduce taxes on large, multinational companies.

As Ronald Reagan famously said, “We don’t have a revenue problem, we have a spending problem.”

A Border Adjustment Tax is not the solution.