Donald Trump’s proposal voiced through House Republican to levy a 20% tax on goods imported to the United States while totalling eliminating tax on U.S. imports and revising tax rates of corporates have divided Corporate America like never before. Companies with net exports have joined hands to form a coalition and have backed Trump’s proposal while others, such as retailers, have formed an alliance to fight the proposal.
A host of U.S. companies, including Boeing Co and General Electric Co, have launched an alliance to back U.S. President Donald Trump’s move impose tax on imports, saying the proposal would “support American jobs and American-made products.”
The group, comprising of more than 25 U.S. companies, dubbed as the “American Made Coalition,” includes Pfizer Inc, Oracle Corp, Dow Chemical Co and Eli Lilly and Co.
The coming together of these companies to back Trump’s border tax proposal underscore the growing trend of a division in corporate America over the imposition of a 20% to 30% tax on corporate income tax, exclude revenues from exports from taxable income and impose a 20% tax on imports.
The proposal is unlikely to sail smoothly in the Senate wherein a few Republicans have openly questioned it from the standpoint that it would raise consumer prices and hurt businesses.
Companies which are heavily dependent on imports, including, Best Buy Co Inc and Target Corp have made their stand clear saying any form of border tax would outweigh the benefits of lower corporate taxes.
Companies such as Boeing, who are net exporters, and those that have purely domestic concerns are set to gain from this proposal.
“American workers and businesses are not competing today on a level playing field with foreign competitors because of an outdated and unfair tax system,” said John Gentzel, a spokesman for the coalition.
The group has stated the current tax system unfairly subsidizes imports of foreign goods.
Lilly’s vice president of corporate tax and finance, David Lewis, has stated in a statement that the group supports the blueprint of the proposal.
A separate group, the Retail Industry Leaders Association, representing more than 120 trade associations and companies, has also been formed to fight the House Republican proposal known as the “border adjustment” tax.
“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,” said Sandy Kennedy, president of the group.
Foreign vehicle manufacturers, including, Toyota Motor Corp, oil refiners and retailers have been lobbying Congress fearing that the imposition of a big border tax will hurt their sales, profitability and put them at a significant disadvantage to rivals.
In its flyers to lawmakers, BestBuy has cited an analyst forecast that the imposition of a 20% tax will not only wipe out its projected annual income of $1 billion but give it a $2 billion loss.