Voters Support a Border-Adjustment Tax, Poll Findsby
A proposal from House Republicans that would levy a 20 percent tax on imports into the United States while exempting exporters has garnered the support of a majority of registered voters who participated in a recent Harvard-Harris poll.
Sixty-two percent of the more than 2,000 registered voters who were surveyed in April said they would support a border-adjustment tax, while 53 percent believe it would expand jobs and the economy. More Republican (66 percent) and African-American (62 percent) voters think the tax would boost the economy.
The border-adjustment tax was included in the House GOP tax reform blueprint that was rolled out last June. According to an analysis by the Tax Foundation, implementing a border adjustment would raise more than $1 trillion in revenue over the next 10 years, which could fund other provisions.
“I obviously think border adjustment is the smart way to go,” House Speaker Paul Ryan (R-WI) said at a news conference on May 18. “I think it makes the tax code the most internationally competitive of any other version we’re looking at. And I think it removes all tax incentives for a firm to move … their products overseas.”
But this tax reform proposal is not without its detractors. The National Retail Federation has come out against the border-adjustment tax, saying it would increase costs on food, gas, clothing, and prescription medicine for the average family by as much as $1,700 in the first year alone.
Many lawmakers in the Senate, including Republicans, have voiced their concerns about the tax. Sen. David Perdue (R-GA) has urged his colleagues to reject it, saying in a letter that it “is regressive, hammers consumers, and shuts down economic growth.”
“For sure, the tax code needs substantive change, but when Congress combines good ideas with bad ideas into a single sweeping bill, the bad ideas become law. This proposed border-adjustment tax is a bad idea and should not become a permanent part of our tax code,” he continued.
Even Senate Finance Committee Chairman Orrin Hatch (R-UT) has some reservations about the border-adjustment tax.
“All I can say is I think it’s got a long way to go and it’s going to be a difficult matter to get through both [the House and the Senate],” Hatch told CNBC in February.
Perhaps most telling is the border-adjustment tax was not included in the wish list of tax changes released by the Trump administration last month.
“We don’t think it works in its current form, and we’re going to continue to have discussions with [House Republicans] about revisions,” Treasury Secretary Steven Mnuchin said last month.
The House Ways and Means Committee will hold a hearing on the border-adjustment tax proposal beginning at 10 a.m. ET on May 23.
Other key findings from the Harvard-Harris poll related to taxes include:
- Two in three voters believe their federal taxes are too high, and more than half feel that paying taxes is frustrating (66 percent), confusing (57 percent), and patriotic (47 percent). However, only 38 percent think paying taxes is good for the country.
- The federal tax system received low ratings on a range of attributes, including simplicity (25 percent), efficiency (25 percent), fair enforcement of rules and laws (27 percent), and ability to stimulate jobs and the economy (27 percent).
- Sixty-two percent of voters gave the IRS negative job ratings.
- A majority of voters (71 percent) favor key parts of President Trump’s income tax plan. The proposal that received the most support (73 percent) was reducing the number of individual tax brackets from seven to three.
[Editor’s note: Where do you stand on the border-adjustment tax? Let us know your thoughts in the “Discussion” box below.]