Colorado Springs — Rep. Mark Meadows, R-N.C., said here Sunday the internal GOP debate over whether tax reform should include a border adjustment tax is at risk of upsetting Republican plans to pass any kind of tax reform bill this year.
“The two questions that have to be answered: when are we going to come to the realization the border adjustment tax cannot be part of real tax reform?” the House Freedom Caucus chairman told reporters on the fringes of the Seminar Network meeting of groups backed by the Koch brothers.
“And the second part of that is, are we going to hold up real debate on tax reform while we make that decision?” Meadows said.
He said those questions should be answered as quickly as possible so Republicans can get somewhere on tax reform this summer, and pass something by the fall. Conservatives are growing increasingly antsy about progress on both tax reform and healthcare, and want to be able to tell voters back home the GOP-led government is making a difference.
“If we can answer those two questions, hopefully we can answer those quickly,” Meadows said. “It is my belief that we need to have the framework of what we’re debating agreed to and in principle without legislative text by the end of July, to allow the whole month of August for those to work on legislative text, and CBO, et cetera, to try to work through some of those things so that we can really start debating it back and forth, both in the House and the Senate.”
But Republican leaders so far have not completely given up the idea of a border adjusted tax. Under that plan, export sales by U.S. companies would not be taxed, but they also could not deduct the cost of imported inputs.
The Koch network of groups is opposed to the plan and say it would effectively raise taxes on U.S. consumers, and would let giant companies like Boeing escape almost all of their U.S. tax liability.
But while Meadows says Republicans need to figure out their position quickly, he said House Speaker Paul Ryan, R-Wis., has not yet given up on the plan.
“The Speaker now understands that he does not have the votes on the border adjustment tax,” he said. “We’re now into the phase of, can he convince enough people to change their mind? And the answer to that is, no.”
Rep. Ron DeSantis, R-Fla., agreed and said the lack of a decision to scrap the border adjusted tax is only holding up and threatening progress.
“It’s the type of thing, thought, that the longer it remains a part of the framework, the chances of successfully completing tax reform declines,” he said.
DeSantis warned that trying to shove it through the House would be a disaster for Republicans.
“I don’t think it can pass the House,” he said. “The failure of the first healthcare bill would seem like a picnic compared to what would happen if you try to bring this thing… it would totally blow apart.”
