Border tax will have a disproportionate effect on some states

Washington Examiner:
Groups backed by the Koch brothers are engaging in a new line of attack against the House Republican import tax proposal, saying it could increase total business taxes in some states by a multiple of four.

A new report from Americans for Prosperity and Freedom Partners released Thursday details the potential state-by-state effects of the tax plan. In one possible scenario in which the 20 percent tax on imported goods became reality, for example, it would mean $1.1 billion in taxes on New Hampshire's current imports, nearly five times the $236 million in all business income tax paid last year.

By providing numbers on the effects of the tax on every state, the groups are providing ammunition for opponents of the border-adjusted tax hoping to sway lawmakers against it. House leadership, however, would challenge the assumptions of the analysis.

"Lawmakers should consider the vital role of importers in their states, and ask themselves whether they are willing to put so much at risk just as state and local economies are starting to turn the corner," said Freedom Partners Vice President of Policy Nathan Nascimento.

Both groups back free-market ideas and favor tax reform, but oppose the import tax included in the House GOP plan. Koch Industries owns refineries, one of the industries most opposed to the idea because it would impose taxes on crude oil bought overseas.
I think the tax is a bad idea any way you look at it.  While I do think that refineries need to make changes to better utilize the light crude that is being produced by shale wells,  there has to be a better way to encourage that development than imposing a burdensome tax on imports.

In Texas, some refineries are already making that move which also results in less pollution in the process.  A 20 percent tax increase on fueling your vehicle would be counter productive.

The increased cost of food that is imported on a seasonal basis would also impact everyone and have no real benefit to American producers who are already selling their produce here anyway.  If you buy blueberries during the season in the US they are available at the grocery store and as they quit producing here, the stores bring in berries from Mexico and South America so that consumers can get them year round.


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