March 31, 2017

New Analysis Compares Tax Rates Paid by Companies Lobbying for/against Border Adjustment Tax

news release

An Institute on Taxation and Economic Policy analysis finds that, on average, companies that are opposed to the Border Adjustment Tax pay higher tax rates than a coalition of companies lobbying against the tax.

The Border Adjustment Tax or BAT is being proposed as part of a broader GOP plan to overhaul the corporate tax code. Under the BAT, when a company exports a product out of the United States, revenue earned from that product would be exempt from the U.S. corporate income tax. Inversely, companies that import products would no longer be able to deduct the cost of these products as an expense.

The business community is split on this plan: separate business-backed coalitions have been created to lobby for and against it.

ITEP’s analysis finds that members of the American Affordable Products coalition, which consists of retail giants, pay an average effective corporate tax rate of 30.6 percent under the current system. This coalition opposes the tax. Members of the American Made Coalition, which includes tech, pharma and other manufacturers, favor the tax. On average, members of that coalition pay a 14.5 percent effective rate (though the rate varies wildly from company to company).

To read more about how the BAT would work and tax rates paid by companies for and against the plan, go to: