WASHINGTON Feb 3 Republicans in the U.S. House
of Representatives are considering possible changes to the
design of their controversial border adjustment tax proposal to
accommodate industries worried about being harmed by the
provision, a top lawmaker said on Friday.
The measure, a centerpiece of the House Republican tax
reform blueprint backed by Speaker Paul Ryan, is intended to
encourage investment and manufacturing in the United States. But
it faces mounting pressure from U.S. retailers, oil refiners and
automakers who fear it could result in higher prices for
consumer goods including gasoline.
Major U.S. exporters on Thursday threw their support behind
a border tax, but President Donald Trump has sent
mixed signals and some U.S. Senate Republicans question whether
it would pass muster under international trade
"We are listening carefully and exploring a number of ideas
on both design and the transition of this provision to
accommodate some of the concerns, valid concerns," House Ways
and Means Committee Chairman Kevin Brady told a conference on
"I'm confident ... that the design of the border
adjustability and the transition of it will allay those
concerns," he added without providing details.
He previously said the committee would look at transition
rules but has not suggested possible design changes until now.
The Texas Republican, whose panel is working on tax reform
legislation, is not considering product or industry exemptions
but said the committee is engaged in discussions with industries
including import-dependent oil refiners.
The border adjustment proposal would exempt U.S. corporate
export revenues from tax but impose a 20 percent levy on imports
by preventing U.S. companies from deducting import costs from
their taxable income.
Import-dependent companies say the sweeping change could
hurt their businesses and customers.
"Their concerns about consumer impacts or tax impacts, we
don't want those either," Brady said.
Brady said the policy would tax all products sold in the
United States equally while matching the export tax approach of
U.S. trading partners.
He acknowledged that the change could be phased in over time
to help smooth the transition but denied that the proposal would
violate international trade rules by penalizing imports or
Business lobbyists have suggested a number of changes, from
a nominal tax to compensate import-dependent businesses to an
import tax rate that would vary by country of origin to match
the taxes U.S. products face abroad.
"We know where we want to go and we're going to listen to
all ideas. But we're going to end up with a tax code that taxes
products at the same equal rate in the United States," he said.
(Reporting by David Morgan; Editing by Andrew Hay)