Mar 03, 2017
Congress Should Make Every Effort to Cut Spending – Not Raise Taxes on Consumers – to Make Tax Reform Possible
Post by Derek Yale
As the debate surrounding the trillion-dollar “border adjustment” tax on consumers and hardworking Americans continues, proponents of the measure insist that it is the only way to cut taxes for both businesses and the middle class and not add to the deficit.
But this isn’t true.
Lawmakers making these bold proclamations in defense of this harmful tax ignore that there are plenty of ways they could shrink our deficits. Closing tax loopholes and broadening the base will grow our economy, but lawmakers could also reduce wasteful spending to make this package happen.
In fact, Americans for Prosperity has already identified more than $2 trillion in wasteful spending, unnecessary programs, and corporate welfare that ought to be eliminated.
Some of these include converting multiple assistance programs for low income individuals into block grants to the states. This is something Speaker Paul Ryan of Wisconsin proposed in his “Better Way Plan” and would save $417 billion in federal spending over 10 years. Another option is to reduce the size of the ever-expanding federal workforce by 15 percent, or 300,000 employees. This would save taxpayers $229 billion over 10 years.
Cutting improper payment rates for federal programs in half would bring in $720 billion over 10 years.
AFP Vice President of External Affairs Chrissy Harbin put it best.
Congress could fix the tax code to deliver much-needed comprehensive tax reform that helps every American – without BAT. Every alternative should be considered instead of the prospect of taking a vote on a trillion-dollar tax hike.
Like we have said, the border adjustment tax is bad politics – and even worse policy.
AXIOS: “House speaker Paul Ryan says the only way major tax reform will get done is if border adjustment is part of it to pay for massive tax cuts.” (Jonathan Swan, “Trump Not Expected To Endorse Border Adjustment Tax Tonight,” Axios, 2/28/17)
FISCAL TIMES: “The proposed border adjustment is arguably the most revolutionary idea in corporate tax reform movement in decades and – if approved – would transform the corporate income tax code into something similar to the European value-added tax or VAT. Ryan argues that his plan is needed…” (Eric Pianin, “Why Ryan’s ‘Border Adjustment’ Import Tax Is So Controversial,”Fiscal Times, 2/21/17)
CNBC: “Rep. Devin Nunes, R-Calif., said … that in his mind, there would be no tax bill without a border adjusted tax.” (Patti Domm, “Border Adjustment Tax Is On ‘Life Support,’ And Tax Reform May Come Later … And With Less Punch,” CNBC, 2/17/17)
NUNES: “This is the only way to leapfrog United States tax code in front of every other tax code around the world.” (Patti Domm, “Border Adjustment Tax Is On ‘Life Support,’ And Tax Reform May Come Later … And With Less Punch,” CNBC, 2/17/17)
CNBC: “Border Adjustment Tax Will Be Part Of Tax Reform, Chief GOP Tax Writer Says.” “The Republican’s Chief Tax writer, Rep. Kevin Brady, told CNBC on Wednesday he is ‘confident’ that the border adjustment tax will be included in the tax reform plan, despite some opposition to the controversial measure.” (Michelle Fox, “Border Adjustment Tax Will Be Part Of Tax Reform, Chief GOP Tax Writer Says,” CNBC, 2/15/17)
WALL STREET JOURNAL: “Border adjustment is essential to overhauling the tax code…, Rep. Kevin Brady (R., Texas), the plan’s chief architect, said Thursday.” (Richard Rubin, “As Tax Debate Heats Up, Lawmakers Struggle To Think Of A Plan B,” Wall Street Journal, 2/17/17)