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Brady: Tax Reform, Including Border Adjustment Tax, Will Pass This Year

The Woodlands’ congressman says border adjustment is needed to make American companies more competitive globally and protect manufacturing jobs. Critics argue it will hurt American consumers and retailers by driving up the cost of imports.


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Congressman Kevin Brady (R-The Woodlands) says he still aims to pass tax reform this year, even as Congress remains bogged down in the health care fight. The House Ways and Means chairman says the reform will include a controversial border adjustment tax.

Border adjustment is a form of consumption tax that lowers the cost of exports and raises the cost of imports. Speaking to Craig Cohen for Houston Matters, Brady said most of America's trading partners already use such a tax. And the fact that the U.S. doesn't is hurting its competitiveness.

"Our current tax code favors foreign products over made-in-America products here and around the world,” Brady said. “So what I'm proposing is that we have equal treatment, that every product coming into America or produced in America be taxed equally at the same low business rate of 20 percent."

Brady said the change would discourage American companies from moving manufacturing jobs abroad. The Tax Foundation, a conservative think tank, estimates it would produce more than a trillion dollars in revenue over the next decade, helping to pay for cuts to corporate taxes.

But the proposal has run into stiff opposition both from Democrats and many Republicans. Critics argue it would hurt American consumers and retailers more than it would help manufacturers.

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Andrew Schneider

Andrew Schneider

Politics and Government Reporter

Andrew heads Houston Public Media's coverage of national, state, and local elections. He also reports on major policy issues before the Texas Legislature and county and city governments across Greater Houston. Before taking up his current post, Andrew spent five years as Houston Public Media's business reporter, covering the oil...

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