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Why the Border Adjustment Tax is Bad for America

Gary Shapiro, President and CEO, Consumer Technology Association (CTA)
The House Ways and Means Committee will meet Tuesday for a hearing about the proposed Border Adjustment Tax (BAT), which could impose a 20 percent tax on goods imported into the United States and, in turn, raise consumer prices nationwide.
Commonly referred to as the BAT, the proposal lacks support in both the House and Senate – and for good reason. It would have a devastating impact on American families, who, on average, would have to pay at least $1,700 more every year for necessities such as food, clothing, prescription drugs and gasoline – a massive tax hike robbing consumers of $1 trillion over the next decade.
This unpopular proposal would also have a disproportionately negative impact on U.S. retailers, our nation’s largest private sector employer. If the BAT were to become law, many businesses’ tax bills would outpace what the average consumer could afford. That would ultimately shutter some businesses and put 42 million American jobs at risk, hampering local economies and shortchanging the national economy by reducing growth and opportunities.
The BAT is more than a waste of government time and resources – it’s a bad proposal that would throttle our economy and weaken its potential instead of strengthening it. President Reagan’s Economic Policy Advisory Board Member Arthur Laffer called the BAT “a major mistake,” adding, “It’s a huge bureaucratic mess, to be honest with you...don’t touch a border tax adjustment. It makes no sense.”
Mercatus Center Senior Research Fellow Daniel Griswold said the BAT would likely be challenged by the World Trade Organization, and could result in retaliatory tariffs against U.S. exports. “U.S. manufacturing exports will suffer,” Griswold wrote. “We’ll lose good-paying jobs making jet engines and computers for export in exchange for lower-paying jobs making sneakers, t-shirts, and bouncy balls. That is not a formula for national greatness.”
Instead of destabilizing the American economy and making life harder for American families, we should be protecting jobs and ensuring that innovators have what they need to build and develop tomorrow’s technologies and solutions. We need proposals that will strengthen our country’s competitiveness in the global market.
We cannot afford to pursue a proposal that is this bad for American families and businesses. The U.S. is long overdue for a corporate tax overhaul. But reform must not come at the expense of the working class. Let’s focus on solutions that foster robust job creation, economic growth and innovation – rather than stifling America’s potential.
The Consumer Technology Association is a member of the Coalition of Americans for Affordable Products. Visit the Coalition of Americans for Affordable Products to learn more about why BAT is bad for America, and contact your Member of Congress to ask them to oppose BAT.