Hope for bipartisan support for House Republicans’ corporate tax reform proposal diminished Friday, as the top Democratic tax writer in the Senate said Speaker Paul Ryan’s plan to adjust taxes at the border would raise taxes on everything people buy in the supermarket.
Oregon’s Ron Wyden, the ranking Democrat on the Finance Committee, said that the border-adjusted tax would be “effectively a grocery tax.”
By taxing imports while exempting exports, it would raise prices on food and clothing and “be a gut punch to working families who are already struggling to get by,” Wyden said at an event hosted by the Washington think tank the Tax Policy Center.
Wyden’s comments are trouble for the House GOP border adjustment plan. The plan has already proved controversial, and several Senate Republicans are siding against it as retailers and other import-heavy industries lobby against it. Speculation over whether the provision will remain part of the tax reform effort has dominated debate in the early going.
Ryan and other advocates of border adjustment had reason to hope that Democrats might favor the idea. The concept was popularized in a study published by the Center for American Progress, a left-leaning think tank, and several Democratic experts have commented favorably on it.
Wyden, however, signaled clearly on Friday that he is not receptive to the House Republican plan. Noting that a few of his Republican colleagues have vocally opposed it, he predicted that the proposal is in trouble. “When your Republican colleagues are on TV hammering a Republican idea… it usually promises the movie is not going to end well,” he said.
In his address to a group predominantly made up of tax experts, Wyden also issued a fairly technical condemnation of several of President Trump’s tax proposals. The policies espoused by Trump, he said would “make tax shelters great again,” exacerbating the inequities in the tax code that allow high-earners to evade taxation while making it impossible for lower-income earners to avoid taxes.
