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Nervous Retailers Launch Ad Slamming Border Adjustment Tax

Tuesday, February 28, 2017 12:19
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(Before It's News)

How do you know America’s retailers are nervous? They make an ad. And while usually it is meant to “incept” consumers to have a strong desire for a particular product or service, in this case the object of the ad is something every retailer across the US hates with a passion: the Border-Adjustment Tax, or BAT.

The proposed BAT, which House Republicans are looking to institute as a way to offset the loss of federal revenue from Trump’s proposed tax cuts, and to support domestic manufacturing, is loved by US exporters but hated by the retail industry because it raises taxes on imports (while encouraging exports).  As a result, on Tuesday morning, the US National Retail Federation, launch the following commercial which is meant to explain the fundamental dilemma faced by retailers – and ultimately consumers – should BAT pass: consumers everywhere like low prices, while the benefits of supporting domestic manufacturing are concentrated in one industry. Rising import taxes will force retailers to pass through prices to consumers which would lead to less end demand, reduced consumption and even more carnage among the US retail sector (which as the latest results from Target demonstrate, is already in pain).

However, if a recent news report is accurate, the ad will have no impact whatsoever. According to Bloomberg, House Speaker Paul Ryan – the biggest proponent of the BAT – has won over an unlikely ally to salvage his controversial tax plan: Steve Bannon. Trump’s top strategist once described Ryan as “the enemy,” but now the former Breitbart News chief is the speaker’s best chance to win approval for his border-adjusted tax, which Republicans currently say has almost no hope of clearing the Senate.

In a handful of White House meetings, Ryan found that Bannon was perhaps the most enthusiastic backer of the border-adjustment plan, according to a senior administration official and a person familiar with the sessions.

A vigorous endorsement from Donald Trump could help save the border-adjustment plan, which is running into strong opposition from the energy industry and retailers. The retailers took the unusual step of launching an advertising campaign on the tax issue aimed at viewers of Fox News’ Fox and Friends and Saturday Night Live, TV programs Trump is known to watch.

The sudden alliance between Ryan and Bannon also shows how Republican leaders are adapting to the ultimate outsider president and seeking to curry favor with the handful of aides who can influence his thinking. It reflects the intense tussle inside the Trump administration to shape the policies of a president still new to Washington.

Inside the administration, the proposed tax has several backers, including Stephen Miller, a senior Trump policy aide; Chief of Staff Reince Priebus, a longtime Ryan ally; newly confirmed Commerce Secretary Wilbur Ross; and trade adviser Peter Navarro, according to a senior administration official. Jared Kushner, a senior adviser and Trump’s son-in-law, is said to be open to the proposal but hasn’t made up his mind.

Meanwhile, former Goldman COO and National Economic Council director Gary Cohn and Treasury Secretary Steve Mnuchin are against the border adjustment part of Ryan’s plan. These and other White House officials have met with Ryan a handful of times to discuss policies including a tax overhaul, according to a person familiar with the meetings. The argument that the border tax could boost goods stamped “Made in America” resonates with Bannon, according to the person familiar with the meetings, citing the strategist’s push for Trump’s protectionist stance during the campaign.

Should Ryan and Bannon manage to get Trump on board, retailers may have just one ally left in Congress: democrats. “Democrats would likely filibuster the GOP’s broader tax plan if it were brought up as regular legislation. Ryan has warned his Republican colleagues that if they don’t use border adjustment to raise revenue, there won’t be any room to implement their desired tax cuts under reconciliation.”

Still, the border-adjustment concept faces fierce opposition from retailers like Wal-Mart Stores Inc., automakers including Toyota Motor Corp. and oil refiners that rely on imported goods and materials. They argue the tax will be passed along to U.S. consumers, who’ll face higher prices for everyday materials. Billionaire investor Warren Buffett joined the criticism Monday, saying the plan “would be a big sales tax” and that it would hit “items that are not yachts or anything like that; they’re things that the ordinary person buys.”

In this case, Buffett may be right.



Source: http://silveristhenew.com/2017/02/28/nervous-retailers-launch-ad-slamming-border-adjustment-tax/

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  • dufus

    retailers opposed to the border tax because all the garbage they sell is imported JUNK.

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