U.S. major exporters including Boeing, Oracle, and General Electric supported border tax adjustment plan and established a pact to support the increase of import tax. While companies that rely on foreign products and suppliers such as Nike, Walmart and Gap oppose the plan.
The Republicans border adjustment tax was designed to revive U.S. manufacturing and to reform corporation tax. Its aims to bring back the manufacturing job back in the American soil. However, controversy about the additional levy on imported goods has sparked controversies among American corporations. Exporters are supportive to the plan as reported by Reuters, while importers oppose the plan.
At least 25 companies including General Electric Co, Boeing Co., Oracle Corp, Dow Chemical Co, and Pfizer Inc has initiated coalition to support the proposal. They established pact "American Made Coalition" which was established to support President Donald Trump plan to revamp American industry.
On the other hand, companies that have a high reliance on imported products oppose the plan. They are Nike and Gap which relies on the foreign manufacturers and retailers like Walmart and Macy's. They established coalition called "Americans for Affordable Products" as reported by CNN.
In its blueprint, the border tax adjustment plan will reduce the corporate income tax to 20 percent and impose 20 percent tax on imports. The 15 percent reduction from previous 35 percent on income tax excludes the taxable income.
Oppositions of the tax plan argued that the tax should not be burdened customers while some other companies receive a tax reduction. Meanwhile, the proponent group argued the plan would create an equal competition between American products and products made overseas, as it removes subsidies from foreign goods.
"American workers and businesses are not competing today on a level playing field with foreign competitors," a spokesperson from proponent group, John Gentzel, said. "Because of an outdated and unfair tax system."
Watch the report from CNBC regarding border adjustment tax which will become game changers for corporations in America below:
