Club for Growth Urges House Republicans to Bat Down Talk of a BAT

Rachael Slobodien - June 20th, 2017

“A border adjustment tax is a ball and chain that is dragging down real, pro-growth tax reform.”

Washington, DC – Today, ahead of Speaker Paul Ryan’s (R-WI) speech at the National Association of Manufacturers, Club for Growth President David McIntosh offered the following statement outlining factors that make for pro-growth tax reform.  In his statement, McIntosh also encourages Republicans to resist implementing a border adjustment tax as part of any tax reform proposal.

“Roughly one year ago this week, House Speaker Ryan unveiled the House Republicans’ blueprint to overhaul the tax code,” Club for Growth President David McIntosh stated.  “In an attempt to craft pro-growth tax reform, the blueprint called for lower tax rates and a territorial tax system for international corporations.”

“But, here we are a year later, and Congress has made little progress towards cutting taxes – even though voters overwhelmingly sent Republicans to Washington with a clear mandate to reduce taxes.

“The biggest impediment to pro-growth tax reform is the Border Adjustment Tax (BAT).   It is a political loser.  The BAT has become a ball and chain that is dragging down real, pro-growth tax reform.  The Republican Senate has made it clear that the BAT is a nonstarter.  President Trump’s proposal also wisely sidesteps the issue entirely – choosing correctly to focus on pro-growth tax cuts, rather than middle class tax increases, which would be the inevitable consequence of a BAT.   

“Any member who campaigned on lowering taxes should not even entertain the idea of a BAT.  However, Speaker Ryan and a few members of Congress, like Ways and Means Chairman Kevin Brady (R-TX), continue to push the idea of a border adjustment tax.  Their unwillingness to abandon the proposal now threatens to doom the best prospects Republicans have to pass meaningful tax reform.

“No matter how Rep. Brady and others may try to sell it—like with a five-year transition period—a BAT will effectively be a $5 trillion tax hike on American consumers.  Those in favor of a BAT try to rationalize it by arguing it is necessary to lower tax rates on corporations.   Club for Growth flatly rejects Speaker Ryan’s green eyeshade notion that in order to pass pro-growth tax cuts, Republicans have to raise taxes.  The BAT would do so at the expense of hardworking American families struggling to make ends meet.  Republicans in Congress should not support it.

“Since its inception, Club for Growth has fought to enact tax reform to lessen the tax burden on American families and businesses and in so doing, unleash economic growth.  Just last week, Club for Growth and Americans for Tax Reform made the case for lasting tax reforms by extending the budget window beyond ten years.  And that’s one of many pro-growth approaches to tax reform, but the border adjustment tax is not.”

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