4 Min Read
WASHINGTON (Reuters) - Chief executive officers of 16 companies, including Boeing Co (BA.N), Caterpillar Inc (CAT.N) and General Electric Co (GE.N), have urged the U.S. Congress to pass a comprehensive tax code rewrite, including a controversial border tax.
In a letter to Republican and Democratic leadership on Tuesday, the CEOs said a Republican-proposed border adjustment tax would make U.S.-manufactured products more competitive abroad and at home by making imported goods face the same level of taxation.
It was the latest move in a back-and-forth lobbying effort from companies over changes to the tax code.
Republican House Speaker Paul Ryan has proposed lowering the corporate income tax to 20 percent from 35 percent, imposing a 20 percent tax on imports and excluding export revenue from taxable income.
The proposal has drawn opposition from large U.S. corporations that require imports, like retailers and auto manufacturers. Those that export much of their output tend to support the tax code changes.
In a separate report, the technology policy group Information Technology & Innovation Foundation called on Congress to lower the corporate rate, but warned that elements like the border tax risked jeopardizing the effort.
"In order for corporate tax reform to succeed in boosting economic growth, lawmakers should focus on the most essential changes that will have the greatest effect on innovation and competitiveness," Joe Kennedy, an ITIF senior fellow, said in a statement.
The ITIF is a nonpartisan think tank whose board members include representatives from large technology companies such as Apple Inc (AAPL.O), International Business Machines Corp (IBM.N) and Intel Corp (INTC.O).
Tony Simmons, CEO of McIlhenny Co, which produces Tabasco, said while his company imports peppers to make its hot sauce, it still expects a net gain.
"We export about 40 percent of our total sales – so the border adjustment works both ways for us," Simmons said on a call Tuesday with reporters. "Our federal rate would drop."
A group of retail CEOs met last week with President Donald Trump and congressional leaders to argue against the border adjustment tax.
Trump is expected to release his tax proposal in the coming weeks. While he has said the border adjustment tax is too "complicated," his administration has said taxing goods from Mexico could fund construction of a wall along the border.
The letter supporting the border tax was signed by CEOs from Boeing, CoorsTek, Caterpillar, Dow Chemical Co (DOW.N), Celanese Corp (CE.N); GE, Celgene Corp (CELG.O), Eli Lilly and Co (LLY.N), Raytheon Co (RTN.N), Merck & Co Inc (MRK.N), S&P Global Inc (SPGI.N), Oracle Corp (ORCL.N), United Technologies Corp (UTX.N), Pfizer Inc (PFE.N) and Varian Medical Systems Inc (VAR.N).
Reporting by Ginger Gibson; Editing by Lisa Von Ahn and David Gregorio