Retail giant Target’s chief executive Brian Cornell warned lawmakers on the House Ways and Means Committee during a hearing Tuesday that implementation of a border adjustment tax would hurt middle class Americans more than anyone else.
Brian Cornell, chief executive officer of retail giant Target, on Tuesday warned lawmakers of the House Ways and Means Committee that implementation of a border adjustment tax, commonly referred to as the “BAT,” would hurt middle class Americans more than anyone else.
“Under the new border adjustment tax, American families – your constituents – would pay more so many multinational corporations can pay even less,” Cornell said.
“We believe this new tax would hit those families hard. Raising prices on everyday essentials by up to 20 percent,” he warned. “We’re not talking about luxury items here, but instead the basics that American families need… Moms in Cincinnati would pay more for back-to-school clothes. Parents in Houston would pay more for groceries. Seniors in Philadelphia would pay more for their medicine.”
An average family of four could end up paying as much as $1,700 in higher prices for staple items such as groceries, clothing and gasoline, according to the National Retail Federation (NRF).
The BAT proposal, which is part of a larger tax reform blueprint, would substantially raise the tax liability for corporations from imports and eliminate them for exports, which proponents say is needed to level the playing field for domestic manufacturers and boost exports. Critically, the proposal raises about $1.2 trillion over 10 years, by some estimates, to help offset the lion’s share of corporate and individual tax cuts envisioned by Republican lawmakers.
Cornell said that under BAT, Target’s tax rate would more than double, from 35 percent to 75 percent.
“It’s simple math,” he said. “If the government takes nearly four out of every five dollars we make – four out of five – there’s no capital to invest and no prospects for growth.”
The Minneapolis-based big-box retailer recently announced plans to spend up to $7 billion to build new stores, renovate older ones and overhaul its distribution network.
“I can’t sign up for a tax plan that would stick American families with the bill, or a plan that would double our tax rate, a plan that would stifle our investment in America,” Cornell told the House committee.
With the exception of pro-BAT supporters, particularly in the agricultural and heavy machinery export sectors, both Republican and Democratic lawmakers are quickly losing interest in the BAT. Questions have also been raised about its legality given U.S. obligations to the World Trade Organization and, if passed by Congress, other countries in the trade body have already warned that they will retaliate with tariffs on U.S. exports.
However, Cornell did not disagree that Congress should simplify the corporate tax code as prescribed in the overall tax reform blueprint.
“Our current tax code is broken. The status quo is unacceptable,” he said. “We’ll put every tax benefit we currently receive on the table – every single one – in order to pass tax reform, spur investment, create jobs, and grow the American economy.”
Target CEO takes aim at BAT proposal
