[CTC] Trump team walks back plan to fund wall with import tax

[Arthur Stamoulis]

http://www.politico.com/story/2017/01/trump-tax-mexican-imports-pay-for-border-wall-234239

Trump team walks back plan to fund wall with import tax
White House press secretary Sean Spicer suggested a tax on imports could fund the border security measure before backing off the proposal.
By MATTHEW NUSSBAUM <http://www.politico.com/staff/matthew-nussbaum> and BRIAN FALER <http://www.politico.com/staff/brian-faler> 01/26/17 04:16 PM EST Updated 01/26/17 06:42 PM EST

White House press secretary Sean Spicer on Thursday walked back his statement that President Donald Trump supports a plan to tax imports in order to pay for a wall along the U.S. -Mexico border.

Spicer suggested that a 20 percent tax on imports from countries "like Mexico" could be used to fund the proposed barrier along the southern U.S. border, and he said the administration was already working with Congress

“When you look at the plan that’s taking shape now, using comprehensive tax reform as a means to tax imports from countries that we have a trade deficit from, like Mexico,” Spicer told reporters on the flight back from Trump's address to congressional Republicans in Philadelphia.

“If you tax that $50 billion at 20 percent of imports — which is by the way a practice that 160 other countries do — right now our country’s policy is to tax exports and let imports flow freely in, which is ridiculous. By doing it, that we can do $10 billion a year and easily pay for the wall just through that mechanism alone. That’s really going to provide the funding,” he said.

“This is something that we’ve been in close contact with both houses in moving forward and creating a plan,” Spicer added. “It clearly provides the funding and does so in a way that the American taxpayer is wholly respected.”

Later, however, Spicer quickly walked back his comments. The a tax on imports, he said, was one possibility for raising revenue, not a specific policy proposal.

"The idea was that there have been questions about how the president could pay for the wall," Spicer said later Thursday. "One idea through comprehensive tax reform is that there could be this idea that [House] Speaker [Paul] Ryan and others have floated, but through tax reform you could actually look at imports from countries that we have a trade deficit with that could generate revenue."

Trying to clarify his original stance, Spicer added: "And the idea is to show that generating revenue for the wall is not as difficult as some might have suggested."

“It could be a multitude of things. Right? It could be, instead of 20 percent it could be 18 it could be 5,” he added. “We could go in another direction, we could talk about tariffs, we could talk about, y’know, other, custom-user fees, or a hundred other things.”

Spicer’s initial statement appeared to be a step from the Trump White House toward House Republicans’ controversial plans to create a “border-adjustable” business tax that would impose a 20 percent tax on all imports, from throughout the world, while allowing exports to be sold tax-free.

House Speaker Paul Ryan has been pressing Trump behind closed doors to endorse the plan, and asked if the administration is endorsing border-adjustment plan, Ryan spokesman Brendan Buck said: “One could certainly read it that way.”

Trump has previously criticized the controversial proposal as overly complicated, but has said the idea remains under consideration. Trump has also repeatedly called for a "border tax" without clarifying whether he means something along the lines of what House Republicans are proposing or old-fashioned tariffs.

Ryan told his colleagues in Philadelphia Wednesday <http://www.politico.com/story/2017/01/republican-agenda-retreat-obamacare-wall-tax-cuts-234176> that Congress would find a way to pay for the barrier.

If used to fund the wall, the tax would also go against Trump’s promise that Mexico would pay for the barrier, as its costs would be shared by overseas producers and U.S. consumers. 

Trump took executive actions Wednesday to crack down on illegal immigration, including directing funds to begin construction of the wall. Mexican officials have repeatedly said they will not pay for the wall, and Mexican President Enrique Peña Nieto on Thursday canceled a planned trip to Washington <http://www.politico.com/story/2017/01/trump-mexico-border-wall-warning-234211> to meet with Trump.

The House proposal, key to their tax-reform plans, is vehemently opposed by retailers such as Walmart and Target, oil refiners, apparel companies and other major importers that fear it will mean huge tax increases — and who warn they’ll pass those costs onto American consumers in the form of higher prices. It could also allow some exporting companies to never pay taxes, and some experts warn it would violate World Trade Organization agreements.

But tax experts say it would make the U.S. corporate code much more competitive, while going a long way towards quashing corporate inversions and other types of multinational tax avoidance. And it’s critical to lawmakers’ plans though because it would raise more than $1 trillion in revenue, which they are relying on to finance a large chunk of their overall tax reform plan.

Spicer's initial statement about a proposed import tax drew criticism on Twitter from two Republican Senators.

"Tariffs are a tax on American families," tweeted Sen. Ben Sasse (R-Neb.).

"Border security yes, tariffs no. Mexico is 3rd largest trading partner. Any tariff we can levy they can levy. Huge barrier to econ growth," Sen. Lindsey Graham (R-S.C.) tweeted.

Graham then took a lighter approach: "Simply put, any policy proposal which drives up costs of Corona, tequila, or margaritas is a big-time bad idea. Mucho Sad," he wrote.


http://www.cnn.com/2017/01/26/politics/lindsey-graham-mucho-sad-border-tax/

Graham ridicules 'mucho sad' border tax proposal

Washington (CNN)Sen. Lindsey Graham isn't quite ready to toast a potential 20% border tax on Mexico.

The South Carolina Republican warned of rising prices on goods from Mexico, in particular citing "Corona, tequila or margaritas" if the Trump administration were to slap a 20% tax on imports from Mexico to help pay for a border wall along the US-Mexico border.
"Border security yes, tariffs no. Mexico is 3rd largest trading partner. Any tariff we can levy they can levy. Huge barrier to econ growth," the South Carolina Republican senator said in a pair of tweets. "Simply put, any policy proposal which drives up costs of Corona, tequila, or margaritas is a big-time bad idea. Mucho Sad."

President Donald Trump himself, of course, is known to end tweets by deciding something to be "sad." Graham -- who, as a GOP presidential primary candidate, once joked "we're going to drink more" <http://www.cnn.com/videos/politics/2015/09/16/gop-debate-cnn-debate-6p-9.cnn> if he were elected -- is a frequent critic of the President.
White House press secretary Sean Spicer announced the proposal earlier Thursday, saying the President was backing the plan and had just discussed it with congressional Republicans in a private meeting. Hours later, amid an uproar from lawmakers on both sides of the aisle, Spicer said that he was simply putting forward one idea Trump is considering to show how the administration could fund the multibillion-dollar construction of a wall on the US's southern border.


Arthur Stamoulis
Citizens Trade Campaign
(202) 494-8826




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