Thursday, December 8, 2016

Koch Industries Says House GOP’s Tax Plan ‘Could Be Devastating’

The Koch brothers are correct on this one, these Republican tax "cuts" are one big shell game.

Lynnley Browning reports for Bloomberg:
Koch Industries Inc., the influential private firm headed by billionaire Republican supporters Charles and David Koch, slammed a key element of the House Republicans’ plan to overhaul corporate taxes, saying it would raise prices for American consumers and “could be devastating” to the economy.
In a statement, Koch objected to the plan’s proposal to replace the current corporate income tax with a 20 percent levy on U.S. companies’ domestic sales and on their imports of foreign goods and materials. Exports under the plan would be tax-free.
The proposal, which is generally known by the term “border adjustments,” would “adversely impact American consumers by forcing them to pay higher prices on products produced in and goods imported to the U.S. that they use every single day,” the company said in the statement...Curt Beaulieu, a tax policy lawyer at Bracewell LLP in Washington, said that the adjustments “are not a tariff” and instead are a so-called “destination-based cash flow tax” -- what he called “mumbo jumbo” for taxing companies on revenues from sales in the U.S....
Retailers, who rely heavily on imports from China and elsewhere, are particularly concerned about the provision. [Rachelle Bernstein, a tax lobbyist for the National Retail Federation} said that specialty apparel stores that import 90 percent or more of their inventory could face tax bills that are much larger than their actual profits.
“It’s going to slam clothing manufacturers hugely,” said Peter Barnes, an international tax lawyer at Caplin & Drysdale in Washington and a former senior tax lawyer at General Electric Co. Prices for U.S. consumers on everything from t-shirts to imported cars would increase by 15 percent to 20 percent, he said.

Of course, the Koch brothers just want a different scam that will benefit them:
Koch’s statement made clear that the company supports a comprehensive overhaul of the U.S. tax system. 
We don't need an "overhaul" of the system which will be nothing but lobbyists getting tax breaks for their clients at the expense of the average American, we need tax cuts applied to the current system.

According to Browning,Trump hasn’t signed on to the border-adjustments plan, but has embraced other elements of a blueprint for tax policy that House Republicans released last summer: Both would cut tax rates for individuals and businesses, eliminate the estate tax and offer a corporate tax break designed to bring to the U.S. roughly $2.6 trillion in untaxed profits now held by American companies’ offshore subsidiaries.

House Republicans have been working with Trump’s transition team to meld their tax proposals as they try to pass the biggest tax overhaul in three decades next year.


1 comment:

  1. I don't think the House Republican plan to overhaul corporate taxes will meet with Donald Trump's approval. Therefore, I think its prospects for becoming law are not that good. Reason being: Trump manufactures many, if not all, of his retail goods(e.g. ties, suits, dress shirts, etc.)outside the U.S.; is he going to agree to a tax plan that would increase the cost of making those goods rendering them uncompetitive and will ultimately costs him money in the form of lost profits?

    I think not.