House GOP Border Adjustment Plan Would Hurt Economy, Republican Senator Says
Georgia Republican Sen. David Perdue in an opinion piece and a letter to Senate colleagues criticized House Republicans’ border adjustability tax plan as detrimental to consumers, jobs and economic growth. In the letter (here), Perdue asserted that border adjustment’s “clear effect” would be an increase in consumer prices, thereby putting downward pressure on jobs. In both the letter and the opinion piece in The Washington Times (here), he cited a University of Maryland study (here) estimating that some industries could see 20 percent drops in employment. The referenced study also projects employment gains for big industries, including about 4 percent for food and beverage retailers and between 5 percent and 12 percent for the truck transportation industry. Perdue, the former head of Dollar General, argued in his letter that if border adjustability were to strengthen the dollar by up to 20 percent, the U.S. will still “end up with more losers than winners,” as U.S. investors will see foreign asset values tumble.
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House Ways and Means Committee Chairman Kevin Brady, R-Texas, "believes that we cannot defend the current tax code that subsidizes foreign products over American-made products and forces American jobs overseas," a spokeswoman said. "Chairman Brady believes we have to take action now to tax all products sold in America at the same equal rate.” Footwear Distributors and Retailers of America spotlighted Perdue’s opposition to border adjustability, adding in a statement that it will be a “big if” to see whether President Donald Trump comes out in support or opposition to that component of the House GOP plan. The White House didn’t comment.