Georgia Senator: Reconsider GOP border tax proposal
ATLANTA, Ga. (WGXA) -- Sen. David Perdue (R-Ga.) is encouraging his colleagues in the Senate to rethink the House of Representatives' tax reform proposal that would implement a tax on imports into the country.
Perdue sent a memo to his colleagues on Wednesday outlining the three points currently under discussion by the House that he calls "pro-growth" and the fourth idea that he called "regressive."
According to his memo, Perdue supports simplifying the tax code "so it makes sense at all economic levels," lowering the corporate tax rate and fixing the "broken international tax system that has trapped over $2 trillion dollars from being reinvested in the U.S. economy."
However, he said the idea to implement a 20 percent "border adjustment tax" on all imports "hammers consumers" and "shuts down economic growth."
Perdue wrote that this tax would increase consumer prices, impact consumer confidence, lower demand and put a downward pressure on jobs. He cited a University of Maryland study that indicates that a border adjustment tax could cause some industries to "face unemployment declines of up to 20 percent."
He also criticized the argument by proponents of the border adjustment tax that it would increase the value of the dollar by 20 percent. He said that this would actually have the effect of reducing the value of foreign U.S. investments, including pension funds. He warned that American seniors "may see their retirement savings evaporate at the same time their living costs increase."
Perdue wrote that although the U.S. tax code needs a "substantive change," a border adjustment tax is not the way to do it.