After months of public debate surrounding the proposed border adjustable tax, yesterday the House Ways & Means Committee formally began review of the potential impact of the tax on the economy.
Target CEO and RILA Board Member Brian Cornell led the charge for retail, explaining in detail for members of the committee why retailers are opposed to the BAT. In his testimony, Cornell pointed to the 42 million jobs currently supported by retail, and insisted that implementing a border adjustable tax would stifle retail job growth and investment, and hurt Target customers. He added that the economic theories used to support the border adjustment tax were "unproven and untested," and urged Congress not to gamble with American families' budgets.
Watch Cornell's full testimony here:
Retailers have been vocal about the harmful effects the proposal would have on businesses of all sizes and on American families, most notably citing the inevitable cost it would pass on to consumers in the form of higher prices for everyday household items.
Earlier this week, RILA released a report developed by Capital Economics which debunks the theory that the border adjustable tax will appreciate the dollar enough to offset the impact on U.S. businesses and consumers. Report authors go so far as to label the dollar appreciation argument as "unreliable," so much so that it makes the border adjustable tax "not worth the risk of attempting it."
In fact, when asked by Representative Jim Renacci whether they can assure a border adjustable tax would have no economic effect on consumers, the hearing panelists all agreed they could not.
After yesterday's hearing, RILA Senior Executive Vice President Brian Dodge said, "anyone who viewed today's border adjustable tax hearing looking to understand if this would work in the real world could only be left deeply concerned."
As the conversation around tax reform and the border adjustable tax continue in the coming weeks, retailers will remain engaged with lawmakers and will continue working to inform consumers and businesses alike about the damage this proposal would have on the economy.