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‘Game On’ for BAT War

BOB MCGEE– FEBRUARY 6, 2017
Paul Ryan, Speaker of the United States House of Representatives.

Brady and Ryan are no longer opponents as they were in last night’s Super Bowl LI in Houston.

In Washington, Ryan, as in House Speaker Paul, and Brady, as in House Ways and Means Committee Chairman Kevin, are playing on the same team in an emerging battle over a proposed plan to tax all imports called a Border Adjustment Tax (BAT).  

Two Coalitions, one for and one against the proposal that would essentially treat imports and exports differently and no longer allow corporations to use cost of goods as a tax deduction, have formed. And making the scenario unusual, corporations can be found in both camps.  

Americans for Affordable Products (AAP), which counts more than 100 members including retailers Dick’s Sporting Goods, Kohl’s and Macy’s and footwear manufacturers Nike, Wolverine Worldwide and Deer Stags, opposes BAT, believing any BAT will increase costs for essential items Americans rely on such as apparel, footwear, food and gas. The organization says it wants comprehensive tax reform with policies that help businesses of all sizes while also ensuring the protection and creation of jobs.  

“Consumers ultimately are the losers from any effort to tax imports because the economy in the United States is driven by consumers,” says Matt Shay, president and CEO of the National Retail Federation, one of the trade group members of the AAP.

The American Made Coalition supports BAT. The coalition, which counts 25 members in manufacturing, software, agriculture and film production, says its goals in supporting BAT center on a level-playing field for American-made goods and services, high-quality American jobs for businesses of all sizes, and an end to tax-motivated shifting of production, technology, headquarters and jobs to locations outside the U.S. It counts Google, Disney, GE, Boeing and Oracle as members.  

The Footwear Distributors and Retailers Association sides with AAP in opposing BAT, saying the implementation of BAT “would bankrupt footwear businesses and kill jobs.” The trade organization had the first of regular Friday conference calls on the tax proposal Feb. 3 with more than 65 members attending.  

FDRA President Matt Priest said a tax concept like BAT emerged in 2005 under then President Bush but did not advance. After telling attendees that there has been talk of a 3- to 4-year phase-in of BAT, if it becomes law, he was asked if the industry could successfully lobby to have footwear exempted from any legislation.  

“This (BAT) is absolutely a threat to our profitability and a dramatic threat to the industry,” Priest commented bluntly. He called the U.S. Senate the “war zone” where FDRA will focus its efforts to stop BAT passage.  

The trade organization, which is planning organized lobbying activities, is urging footwear executives visiting Washington to make the rounds on Capitol Hill and to also be involved in its letter-writing campaign to their members of Congress to actively voice their opposition.

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