(Bloomberg)—U.S. retailers are working with lawmakers in the House and Senate to craft alternatives to a proposed tax on imported goods that they say will raise prices for consumers.
“We’re in the process of working with the Hill to give a couple of different alternatives to what we think would be a regressive tax,” J.C. Penney Co. CEO Marvin Ellison said Friday in an interview.
Ellison was part of a group of retail CEOs that met with President Donald Trump last week. Tax reform and specifically the border-adjustment tax, which has been trumpeted by House Speaker Paul Ryan as the centerpiece of how to help pay for corporate tax cuts, was the focus. The executives voiced their concerns to the president and proposed other ways to lower rates rather than taxing imports, he said.
“Hopefully some of the recommendations we’re putting forward will make their way toward any future tax reform,” Ellison said. He declined to give details on the alternatives discussed. J.C. Penney is No. 33 in the Internet Retailer 2016 Top 500 Guide.
Ryan and House Ways and Means Chairman Kevin Brady have been struggling to gain support for their border-adjustment concept from other Republicans. Their plan would replace the corporate income tax with a new, border-adjusted levy on U.S. companies’ domestic sales and imports. The proposal has stirred sharp divisions among businesses: Retailers, automakers and oil refiners that rely on imported goods and materials oppose it, while export-heavy manufacturers support it.
AshLee Strong, a spokeswoman for Ryan, didn’t immediately respond to a request for comment.
A formal alternative to a border-adjusted tax hasn’t yet been created, according to people familiar with the lobbying effort. Some of the ideas being considered include not reducing the corporate tax rate to as low as 20% as in the House plan, said the people, who asked not to be named because the talks are private. Another suggestion is to create a program for companies to repatriate overseas profits and use the taxes generated to help pay for the corporate tax cut, the people said.
Trump had initially called the border-adjusted tax “too complicated,” before aides more recently said he was warming to it. He has said he will unveil a tax plan in the next few weeks. The White House has sent signals that it’s embraced the idea of some kind of a tax on imports, but hasn’t adopted the border-adjustment tax yet, the people said.Favorite