(Bloomberg) House Speaker Paul Ryan says he agrees that his proposal for a border-adjusted tax needs to be changed if it’s to pass Congress, but he said he’s not giving up on the idea.
At the same time, he acknowledged that he and other Republican leaders are discussing whether it’s possible to move forward on a comprehensive tax overhaul without the controversial border-adjustment concept. “Of course, that’s the kind of conversation we’re having,” Ryan said during an event sponsored by Axios, a new-media company, on Wednesday.
Ryan and other House Republican leaders have proposed a major tax revision that would replace the current corporate income tax with a 20 percent tax on U.S. companies’ domestic sales and imports. Exports would be excluded—creating the “border-adjusted” effect. The proposal, which Ryan says is aimed at creating a level playing field with other countries, has stirred opposition among retailers and other industries that rely on imported goods.
Treasury Secretary Steven Mnuchin told members of the conservative House Freedom Caucus on Tuesday that he and President Donald Trump are inclined to oppose the border-adjusted tax, according to two people familiar with the conversation who asked not to be identified because the meeting was private.
Ryan said Wednesday that he had spoken with Mnuchin—and that the Treasury secretary said he doesn’t support the border-adjusted tax “in its current form.” Ryan said he agrees with that point of view and that questions he wants to address are “how do we blend these approaches? How do we phase things in? What do these alternatives look like?”
Ryan said he agrees with Mnuchin that “full immediate border adjustment” would “be too disruptive.”
Opponents have said the tax would increase the price of consumer goods and damage import-reliant companies. Proponents say the measure would lead to a strengthening dollar, which would even out the effects on prices over time.
Ryan said overhauling taxes is one of the top items on congressional leaders’ agenda now. “We’re spending a great deal of time on that.”
