Retailers are not relenting in their effort to kill the “import tax” included in the House Republican tax reform plan.
The National Retail Federation on Thursday announced a new ad campaign meant to target Republicans who support the border-adjustment feature in the tax reform plan, one that portrays the idea as a mortal threat to small businesses.
The campaign will begin with two weeks of television and digital ads in House districts, according to the industry group, featuring brief interviews with three small business owners.
The 30-second ad that will run on air features the owner of a small chocolate maker in Massachusetts warning that the border adjustment would raise her costs, tearfully saying that the provision “is going to kill us.”
Part of the House GOP’s plan, which would lower rates and simplify the tax code, is to tax sales based on destination. Companies’ exports would not be taxed, but businesses would not be allowed to deduct the cost of imported goods from their taxable income. Given the 20 percent corporate tax rate envisioned in the plan, that effectively would create a 20 percent tax on imports.
House Speaker Paul Ryan and other backers of the plan maintain that the dollar would appreciate in response to the border adjustment, meaning that importers would maintain the same purchasing power, in addition to the other benefits of tax reform. Retailers, however, have not been convinced.
“Small business owners are already struggling to survive in an over-regulated marketplace, and the border adjustment tax would push many of them under water,” said David French, senior vice president of the federation.
The border adjustment has sparked an enormous industry vs. industry fight, pitting retailers, refiners and other import-heavy industries against major exporters. Of all the groups involved, the National Retail Federation has been out in front with negative advertising.
In February, it attacked the import tax with an SNL-style parody video comparing it to a product that would raise taxes on everything.
