Many leading exporters of the US, including big names like General Electric (NYSE:GE), Oracle (NASDAQ:ORCL), and Boeing (NYSE:BA), formed a coalition in favor of House Republican strategy to impose tax on all imports, stating the plan would support products made in America and American jobs.
This ‘American Made Coalition’ also includes many other companies like Dow Chemical (NYSE:DOW), Pfizer (NYSE:PFE), and Eli Lilly (NYSE:LLY). Overall, there are 25 companies as a part of this coalition.
John Gentzel, a spokesperson representing the group said – “American workers and businesses are not competing today on a level playing field with foreign competitors because of an outdated and unfair tax system.”
The launch of this group highlights a segment in corporate America over this House Republican proposal, which would slash corporate income tax from 35-percent to 20-percent, excluding export revenue from the taxable income and imposing 20-percent import tax.
Foreign automakers, retailers, and oil refiners have been petitioning against huge import taxes, which according to them would badly affect their sales and gains, placing them at a disadvantage to competitors more dependent on products made in the US.
Donald Trump, the new President, has forwarded mixed views about border taxes. This proposal could experience challenges in the US Senate, where many Republicans interrogate if it would excessively increase the prices for US businesses and consumers.
According to firms that greatly depend on imports (companies like Best Buy and Target Corp), the border tax would offset the advantage of a corporate tax with lower headline. On the other hand, net exports, which are completely domestic, feel they would be at the benefiting end.
The present tax system is unjust at subsidizing imports of foreign products, according to the coalition.
Several companies, which are a part of the coalition, successfully created their own group in the year 2015 to save the government-backed loan program Export-Import Bank, which assists foreign purchasers buy American exports.
In the meantime, on Wednesday, a different coalition was launched by the Retail Industry Leaders Association, which represents over 120 companies and trade associations in an attempt to fight the proposal of the House Republican called ‘border adjustment’ tax.
The group’s President, Sandy Kennedy said – “The border adjustable tax is harmful, untested, and would put American retail jobs at risk and force consumers to pay as much as 20 percent more for family essentials.”
Best Buy has given the lawmakers a flyer that cites an analyst prediction that a 20% tax would erase the predicted annual net income of one billion dollars for the company and change it into a loss of two billion dollars.