With Republicans in control of the White House and both Houses of Congress, 2017 offers the best chance for comprehensive tax reform that we've seen in years or likely will see for years to come. Things will move fast, due in part to the fact that Congress has done a tremendous amount of preparatory work in the past several years and in part to the fact that President Trump wants to demonstrate accomplishments in the first 100 days of his administration.
House Republicans and President Trump have issued tax reform proposals, and while they are similar in some ways, they also differ significantly. The final package that gets debated in Congress will likely be a combination of the two.
FIA will likely see draft legislative text soon and have some opportunities to provide input on behalf of its members before and during FIA Lobby Day 2017, which will be held March 15–16, 2017.
FIA needs your input on one concept that House Republicans are considering regarding border adjustability. The concept is that you would get a credit for any exports you make (similar to the way the Value Added Tax works in Europe); however, there would be no credit for imports, and in fact a 20 percent (the new corporate rate under the plan) tax on imports. If you do not export your products and you do not import any raw materials/components, then this likely wouldn’t affect you. But, if you do not export and you do import some things, then it is possible you would be at a competitive disadvantage under the tax proposal compared to a company that exported.
We need to get a sense of how many (if any) FIA members export products and/or import raw materials/components to be able to have meaningful conversations on Capitol Hill as the tax reform legislation takes shape. Please contact The Laurin Baker Group, FIA’s Washington representative, if you have any insight to offer on this aspect or any other of potential tax reform efforts. You can reach Jennifer Baker Reid at [email protected] or 202-393-8524.