BAT Tax Proposal Takes Center Stage at Ways and Means Hearings

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May 31, 2017

During the second part of the House Ways and Means hearing on proposed tax reform measures, the border adjustment tax (BAT) came under intense scrutiny as retail industry leaders and economists offered widely divergent testimony.  Key concerns raised were the possible negative repercussions which it held for import-reliant domestic industries, such as the retail sector; the likelihood that WTO partners would challenge it; and the disproportionate harm that it might cause to the middle class. 

Witnesses from the retail industry, though concerned that the BAt would mean higher operational costs, agreed that it might also offer long-term overall benefits, provided lawmakers proceeded deliberately and maintained close communication with import-dependent sectors through the legislative process.  Economist witnesses disagreed whether a challenge to the BAT at the WTO were a remote possibly or virtually inevitable, should it be enacted.  

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