Executive Lobbying War Breaks Out Over Border Tax Proposal

The chief executive officers of some of America’s most iconic corporations have lined up on opposite sides of what’s quickly become an intense lobbying war over a House Republican plan to reform the tax code by taxing firms that import while exempting exporters.

At issue is the “border adjustable” proposal in the House GOP tax plan. President Donald Trump plans to meet with CEOs of manufacturing corporations on Thursday, though his position on the tax plan remains unclear. Many U.S.-based manufacturers that export have thrown their support behind the plan.

White House Press Secretary Sean Spicer said the meeting gives the companies a chance to share their views on job creation and economic growth. Trump plans to “let that conversation play out,” Spicer told reporters on Tuesday.

Trump heard from the opposite side last week, when CEOs from major retailers like the Walgreens Boots Alliance and Target met him and Republican lawmakers. Those companies have led an industry coalition, Americans for Affordable Products, whose goal is to sink or alter border adjustability.

The retail industry’s visit to Washington coincided with several senators stating their opposition to the plan. On Thursday, Sen. Tom Cotton, an Arkansas Republican who represents Walmart’s corporate headquarters, said he had “serious concerns” about the proposal. “Just because an economist slaps an equation on a blackboard doesn’t make it real,” Cotton said in a floor speech. Colleagues including Sens. David Perdue (R-Ga.) and Lindsay Graham (R-S.C.) have echoed his skepticism.

Opposition and support have crystallized even as tax reform legislation has yet to see the light of day. The intense lobbying push suggest all parties recognize tax reform may have a real shot at passing, said Jeff Kupfer, a former Treasury Department official who also worked for Republicans on the Senate Finance Committee.

“The fact that you’re seeing more engagement at the most senior level of companies, I think, suggests that people are taking this very seriously and recognize that a lot of the forces are coming together to make this an ideal situation to push through tax reform in the coming year,” Kupfer said in an interview.

House Ways and Means Committee Chairman Kevin Brady (R-Texas), perhaps the most vocal proponent of border adjustability, said on Monday he is “not too worried” about the recent turbulence.

“We want the Senate to continue to look at it,” Brady said in a Feb. 20 interview on the Fox Business Network.

Supports of the tax plan, including the American Made Coalition, also say they have plenty of time to make their case to lawmakers.

The Coalition, which includes CEOs of export-oriented companies such as Boeing, General Electric, Eli Lilly & Co. and Oracle Corp., wrote to congressional leaders calling border adjustability a “critical” part of the Hill’s tax reform plan.

In part, the companies see border adjustability as an offset for other tax cuts included in the GOP plan. They also believe the plan “is consistent with the tax policies of nearly every other country in the world, and it would effectively end the ‘Made in America’ tax that creates an unfair advantage for foreign-based companies at the expense of U.S. jobs and economic growth.” According to a July analysis from the Tax Foundation, border adjustability would raise $1.1 trillion, helping offset the tax plan’s other costs over a 10-year period.

Meanwhile, liberals leery of a cut to the corporate tax rate are watching the debate from the sidelines until Congress starts work on legislation.

“We’ve been sort of content to let corporate America fight this one out,” said Frank Clemente, the executive director of Americans for Tax Fairness.

Morning Consult