House Republicans seeking a divisive overhaul of corporate taxation got a major private-sector boost Thursday, with the launch of a business coalition specifically backing the part of the tax plan that has drawn opposition from retailers, refiners and other big importers.
General Electric, Dow Chemical, Boeing, Pfizer, Eli Lilly and other major multinational corporations are among the backers of the American Made Coalition, a new group set up to advocate for the border adjustment provision of the House Republican tax reform plan.
The provision effectively would tax imports as part of a broader corporate rate-cutting reform that would tax goods based on where they are sold. In the plan, companies would no longer be allowed to deduct the cost of imported goods and services but would no longer pay any taxes on revenues from exports. In today’s system, U.S. companies are taxed on all profits, whether they are earned in the U.S. or abroad. Republicans say the change would encourage more manufacturing within the U.S. and discourage companies from moving production overseas.
Companies such as Walmart that rely heavily on imported goods have sought to stop the measure, announcing their own advocacy group Wednesday for that purpose.
But big exporters would be winners under the plan. Depending on the details, it is possible that some might actually get government refunds year after year, under the border-adjusted plan.
The new group is meant to help promote the border adjustment feature of the tax plan and is separate from another business group, the Alliance for Competitive Taxation, that last week came out in support of the GOP plan more generally, without specific support for the destination-based tax part.
There appears to be significant overlap among the groups.
Of major businesses, only Dow Chemical, General Electric, Boeing, Pfizer and Eli Lilly confirmed to the Washington Examiner that they are part of the American Made Coalition, which claims membership of more than 25 companies from a range of industries.
Also said to be in the coalition are Honeywell, Caterpillar and McIlhenny Co., the maker of Tabasco.
Kevin Brady, the chairman of the House Ways and Means Committee tasked with writing the legislation, said last week that support from businesses and CEOs would be necessary to passing tax reform.
Now the tax reform effort is partly an industry-versus-industry battle.
But views of the border adjustment also differ ideologically, not just based on corporate bottom lines.
Some Republicans and conservative-leaning experts have expressed skepticism of the plan to move to a destination-based tax system. At the same time, the concept has received support from left-leaning economists and some Democrats.
