7 key players in the GOP’s border tax fight

Republicans are fiercely divided over a key proposal in the House GOP tax reform plan, a measure that would hit imports with U.S. taxes while exempting exports.

The border-adjusted tax was included in a tax blueprint House Republicans released in June, which is a starting point for upcoming legislation.

Supporters say the border tax is a critical way to raise revenue to pay for tax cuts in the package and to boost American manufacturers.

{mosads}But the border tax proposal is facing mounting opposition from business groups and many GOP lawmakers worried that consumers will be hit with higher prices for goods.

That opposition could imperil GOP plans to pass tax reform, one of their top agenda items for 2017.

Here are some key players in the debate:

 

Speaker Paul Ryan (R-Wis.):

Ryan says he’s committed to passing tax-reform legislation that includes the border tax.

He believes American-made products are at a disadvantage over foreign-made goods and sees the tax as a way to level the playing field for U.S.-based manufacturers.

And Ryan’s been on the front lines to defend the proposal.

Ryan met with Senate Republicans during a lunch Tuesday looking to tamp down growing opposition in the upper chamber.

And he offered a lengthy defense of the tax during his weekly press conference on Thursday.

“We are doing tax reform. Tax reform is going to happen. And do you know why tax reform is going to happen? Because it has to happen,” Ryan said at the press conference.

“America has the worst tax code in the industrialized world. It is killing economic growth. It is driving companies to become foreign companies.”

 

Rep. Kevin Brady (R-Texas):

As chairman of the House Ways and Means Committee, Brady is doing the heavy lifting on tax reform while also playing a large role in the efforts to repeal and replace ObamaCare.

Brady is a close ally of Ryan’s on tax reform and wholeheartedly backs the border tax.

His committee is selling the proposal as a way to end the “Made in America tax” on exports. Brady also argues that the tax will make companies less likely to move jobs and headquarters overseas.

The chairman has been active in selling the proposal: Brady has spoken at a number of trade associations’ events, and he’s been frequently appearing on cable news to argue for the tax as well.

“If you don’t have that in there, tax rates on our local businesses … will go up, our tax code will continue to favor foreign products over American-made products, and we’ll continue to have major incentives to drive jobs and headquarters overseas,” Brady told CNBC Wednesday.

 

Sen. David Perdue (R-Ga.):  

Perdue has emerged as one of the leading opponents to the border tax in the Senate.

A former businessman and turnaround specialist who served as CEO of Reebok and Dollar General, Perdue says he supports much of the House Republicans’ tax plan but is worried that border adjustability would hurt economic growth.

Perdue wrote a letter to colleagues urging them to reject the proposal, and he said in a Senate floor speech that the border tax “would hammer consumers, shut down economic growth and ultimately grow the size of government.”

 

Sen. Orrin Hatch (R-Utah):

As chairman of the Senate Finance Committee, Hatch will play a key role in drafting any tax legislation produced in the Senate.

Both sides in the fight are closely watching Hatch, who so far hasn’t taken a hard stance on the tax.

In a speech at the Chamber of Commerce earlier this month, Hatch said he had several questions about the proposal that he needed answered before he could take a definitive position.

The Utah Republican also said that the Senate will have to look at tax reform on its own and is unlikely to just pass legislation produced in the House.

 

Treasury Secretary Steve Mnuchin:

Mnuchin has only been on the job for a few days and has given little indication so far about where he stands on a border-adjusted tax.

But his views will likely be crucial to determining how the administration comes down on the proposal.

At his confirmation hearing, Mnuchin said he would be the administration’s leader on tax reform.

But Trump’s White House has many powerful voices.

White House chief strategist Stephen Bannon reportedly likes the border tax. National economic director Gary Cohn told CNBC earlier this month that the administration is “exploring every and all options to get our U.S. corporate tax rate down to the lowest possible level we can get it” but avoided taking a definitive stance.

 

The Koch brothers:

Charles and David Koch are major Republicans donors and have not been shy about expressing their opposition to the tax.

Their business conglomerate, Koch Industries, put out a statement in December that “the proposed border tax adjustment will distort the market, increase consumer prices and create an uneven playing field for companies and consumers alike.”

Koch Industries says it would benefit from the tax because they make many goods domestically, but the company also includes refineries, which could be hurt by an import tax.

A Koch-backed advocacy group, Americans for Prosperity, is also bolstering its efforts to advocate against the tax. The group announced Thursday that it has plans to meet with lawmakers and their staff and will key-vote legislation that includes border adjustability in order to rate lawmakers on their positions.

 

Grover Norquist:

Norquist, the president of Americans for Tax Reform, said on CNBC last month that he doesn’t like the border tax on a standalone basis. But he would be fine with the measure as part of House Republicans’ overall tax-reform package.

“If it was stand-alone, the answer would be no,” he said. “Side-by-side in a net-significant, several trillion dollar tax-reduction package, the whole package is pro-growth.”

He told The Hill on Friday that anyone who criticizes a specific piece of the House GOP proposal should be prepared to provide an alternative that has political support and fits into the overall package.

Republicans are eager for Norquist’s seal of approval on tax issues. Both supporters and opponents of the tax have seized on Norquist’s comments, signaling the weight his views carry in GOP circles.

Ryan’s office sent reporters a CNBC article claiming Norquist’s endorsement, while Perdue noted in a Washington Times op-ed that Norquist only backs the proposal “because it’s combined with the other positive changes to the tax code.”