At the OTR Conference, during our discussion on tax reform, we went into the “border adjustability” provisions set forth in the House Blueprint Tax Reform package. As you probably know, these provisions are quite controversial. Under this proposal, exports would not be subject to corporate tax while imports would be subject to tax. It is intended to promote US manufacturing.
This provision has pitted companies that primarily export (for instance, Boeing and Caterpillar), which are obviously in favor of it, against companies that import (for instance, Walmart, Target, Best Buy, most retailers, your local gas station), that believe not only would the provision be detrimental to them but also to the consumer. Companies that oppose the proposal are stressing that costs of producing their goods will go up by 20% and that they would have to pass the cost on to the consumer.
