WASHINGTON — Retailers celebrated congressional Republicans’ recent move to give up their pursuit of the border adjustment tax (BAT).
Prior to GOP leaders’ announcement of the decision on July 27, retailers that receive many of the goods they sell from overseas had expressed concerns about the BAT, claiming that it would pass hefty costs on to consumers.
“We did a little happy dance over here,” said Michelle Ahl-mer, executive director of the Arizona Retailers Association, which fought the tax proposal. “There’s no way for businesses to cover that cost,” she added, meaning that the BAT would have led to higher prices.
Before the decision, it looked as if retailers’ fight against the BAT was heating up, with the National Retail Federation (NRF) even sending a letter to Congress titled “Congress Should Focus on Income Tax Reform, Not BAT.”
The border adjustment tax, originally introduced and backed by House Speaker Paul Ryan (R., Wis.), had since divided Republicans in Congress, and some of America’s biggest retailers were looking to tear it apart. The proposal would have hiked prices of imported goods to the U.S.
“Today’s update on the status of tax reform is very encouraging, particularly since the border adjustment tax is no longer under consideration,” NRF president Matthew Shay said in a statement at the time of the announcement. “By removing this costly element of reform, the way has been cleared for swift action on a middle-class tax cut that will put more money in the wallet of the American taxpayer.
“Changing our outdated tax code is fundamental if we are to grow our economy, encourage investment and create jobs.”
The National Association of Chain Drug Stores also commended congressional leaders and the White House for the decision to set aside consideration of a border adjustment tax.
“From the beginning of this debate, NACDS aligned with Americans for Affordable Products, given our strongest of concerns about the BAT,” said NACDS president and chief executive officer Steve Anderson. “We have urged our nation’s leaders to set aside the BAT from a health and wellness perspective, from a total-store perspective, from a consumer perspective, from an employee perspective and from an employer perspective.
“From all of these viewpoints, we commend congressional leaders and the White House for listening to the concerns raised by NACDS, by Americans for Affordable Products and by many others, and for deciding to not pursue the BAT.”
Throughout the year, NACDS had articulated its position on the BAT in outreach to the Senate Finance Committee and to the House Ways and Means Committee, as well as through congressional meetings conducted by NACDS board members.
“With BAT out, Washington has an opportunity for the first time in more than a generation to pass a tax reform plan that boosts American businesses and family budgets,” Retail Industry Leaders Association president Sandy Kennedy added.