Proposed Border Tax to negatively affect 10 Us States | Financial Buzz

Proposed Border Tax to negatively affect 10 Us States

A 15 page long report authored by Freedom Partners and Americans for Prosperity, a Koch backed think tank, says that the proposed import tax of 20 percent would harm the economy of all 50 US states. Among them, the most affected will be 10 of them- Georgia, Louisiana, South Carolina, Texas, Illinois, Kentucky, California, Michigan, Tennessee and New Jersey.

Against such a step

This proposed tax will exempt revenues from US exports to be subjected to federal corporate tax. However, it would impose a 20 percent import tax to stop American companies from deducting the expense of imported supplies and also goods.

It is interesting to note that Georgia, Louisiana, South Carolina, Texas, Illinois, Kentucky and Tennessee all voted overwhelmingly for Donald Trump. The April 6 report says that these states in particular will be hit hard economically if the Republican supported border adjustment tax makes in into law as a component of broader tax reform.

This report is the latest of many salvos on the Republican plan of tax reform. The scheme is backed by Paul Ryan, the House Speaker. Prominent among the many groups leading the assault are David Koch and Charles Koch, the billionaire industrialists. The two are known supporters of conservative causes and conservative political candidates.

Trump is sure to face a rock road ahead due to such intense opposition to border adjustment tax (BAT) from import dependent industries. The Kochs also opposed the health care legislation championed by Trump. They pledged adequate campaign support for those conservative lawmakers who pointedly refused to vote for this bill in March.

Koch opposition

A number of Senate Republicans already oppose BAT. They have the power to debar its passage, in-case the House gives its approval to tax reform bill containing it. The report authored by the Koch entity states its case on each US state basis. The document will only reinforce opposition among the Senate and House lawmakers.

The Koch organizations, foremost among them Koch Industries, privately held by the brothers, have repeatedly warned that such border adjustment tax will destroy the American economy through the rising consumer good prices, including gasoline. The Kochs arrived at their assessment by comparing value of each US state's 2014 imports to the state's gross domestic product (GDP). The Koch held groups reiterate their support for tax reform but fiercely oppose BAT. It is no coincidence that refineries under the ownership of Koch industries depend on Canadian oil exports.

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