Apr 06, 2017

Freedom Partners & Americans for Prosperity Release Border Adjustment Tax State Impacts Study

Post by Freedom Partners

Every State Loses Under a 20% Import Tax; Importers to be Hammered with Higher Costs

Arlington, VA – Freedom Partners and Americans for Prosperity today released a new study showing the extent to which the proposed Border Adjustment Tax (BAT) would impact importers on a state-by-state basis.

If enacted, BAT would impose a new 20-percent tax on everything that is imported into the United States – from tennis shoes and t-shirts, to crude oil and auto parts. But the size and scope of the trillion-dollar tax — as it relates to impacts on individual state economies – is staggering.



Freedom Partners and Americans for Prosperity are both strongly supportive of efforts to replace our nation’s broken tax code with a simple, efficient, equitable, and predictable system that promotes long-term economic growth and opportunity for all Americans. While there are many laudable tax reform proposals on the table that would lower rates, eliminate loopholes and carve outs, simplify tax filing, and spur economic growth, a 20-percent import tax threatens to undermine these positive aspects of comprehensive reform.

Topline Findings:

  • Every U.S. state would be harmed by a blanket tax on imported goods, especially those in which imports already play a substantial role in the economy.
  • Even with partial dollar appreciation, a 20-percent import tax could mean billions in new taxes for businesses in many states.
  • These cost increases would fall directly on importers – and subsequently consumers – with the auto and retail industries among the hardest hit.
  • In some states, the tax bill on imports under BAT could be double, triple or even quadruple the size of all federal business taxes the state currently pays.

Freedom Partners Vice President of Policy Nathan Nascimento issued the following statement:

“Americans deserve comprehensive, pro-growth tax reform, but a new tax on U.S. consumers is the wrong approach. We need to lower rates for families and businesses, simplify the tax code, and cut wasteful spending – not impose a new tax on millions of Americans.

“Lawmakers should consider the vital role of importers in their states, and ask themselves whether they are willing to put so much at risk just as state and local economies are starting to turn the corner. We urge lawmakers and the administration to listen to the serious concerns of their colleagues in the Senate anddrop this harmful policy.”

Americans for Prosperity Chief Government Affairs Officer Brent Gardner issued the following statement:

“A new trillion-dollar tax would make going to the store, filling up the gas tank, buying critical medicines and saving for the future more difficult. While the Senate has signaled this proposal won’t pass muster, the continued push for a 20-percent import tax in the House is endangering our chance to achieve comprehensive tax reform.

“Americans for Prosperity stands committed to working with Congress towards pro-growth tax reform and getting the tax system working for every American, but a 20-percent tax hike on everyday products is the wrong approach.”

Americans for Prosperity, with 36 state chapters and over three-million activists nationwide, has identified more than $2 trillion in wasteful spending, unnecessary programs, and corporate welfare that could to be eliminated instead of imposing a new tax on U.S. consumers.

Freedom Partners recently called on Congress to reject potential “modifications” to the House BAT proposal, such as delaying or phasing-in the new tax over time or including new tax loopholes and exemptions for special interests that would make this harmful policy worse.

READ: Border Adjustment Myth Vs. Fact
READ: U.S. Senators Pan Border Adjustment Tax; Former Deputy U.S. Treasury Secretary Says It’s “Likely Dead”
READ: Border Adjustment Tax “Modifications” Make Harmful Policy Worse
READ: Border Adjustment Tax Theory Rests on Shaky Ground – at Best