Texas will be negatively impacted by a border adjustment tax, study shows
WASHINGTON -- Texas is among the top 10 states in the country that will be negatively impacted by a proposed border adjustment tax due to its high reliance on imported goods, a new study released on Thursday shows.
The study examined the state-level impact of the border adjustment tax, which would levy a 20 percent tax on all imported goods. States like Texas that rely heavily on manufacturing and imports fared poorly are considered the most sensitive to the border adjustment tax. Other states among the countrys most sensitive include Michigan, Louisiana, Tennessee, New Jersey, Kentucky, South Carolina, Illinois, Georgia and California.
If a BAT had been in effect in 2014, for example, importers in just three statesCalifornia, Texas, and Illinoiswould have faced a potential combined $170 billion liability under a 20 percent tax on imports on top of their regular income tax liability, the study said.
The study was conducted by Americans for Prosperity and Freedom Partners, conservative groups backed by the deep-pocketed Koch Brothers. Americans for Prosperity and Freedom Partners supports the effort to reform corporate and personal income taxes but opposes using a border adjustment tax as a way to make the plan revenue neutral. Making the plan revenue neutral after 10 years keeps tax reform exempt from a 60 vote threshold in the Senate, a necessity when Republicans only hold 52 seats.
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