| WASHINGTON, April 6
WASHINGTON, April 6 Seven U.S. Republican states
carried by President Donald Trump would be among the hardest hit
if a Republican-backed border adjustment tax became law as part
of a broad tax reform, according to a report from conservative
groups that oppose the tax.
The 15-page document, released on Thursday by the
Koch-backed Freedom Partners and Americans for Prosperity,
warned that border adjustment's proposed 20 percent import tax
would harm all 50 states, but identified 10 that could suffer
the most because of their dependence on imports.
The report predicts harm to Georgia, Kentucky, Louisiana,
Michigan, South Carolina, Tennessee and Texas -- all states
Trump won in the 2016 presidential election. The list of
hard-hit states also includes California, New Jersey and
Illinois, carried by Democrat Hillary Clinton.
The report is the latest in a long-running assault on the
centerpiece of a Republican tax reform plan, backed by House
Speaker Paul Ryan, from a network of groups associated with the
billionaire industrialists Charles and David Koch, who are major
supporters of conservative political candidates and causes.
Opposition to the border adjustment tax, or BAT, from the
Kochs and import-dependent industries suggests a rocky road
ahead for Trump's next top priority: passing the biggest tax
reform package since the Reagan era.
The Koch network also opposed Trump's failed healthcare
legislation, pledging campaign support for conservative
lawmakers who refused to vote for the bill last month.
BAT is already opposed by a number of Senate Republicans who
could prevent its passage, should the House approve a tax reform
bill that contains it. The Koch report's state-by-state
breakdown could help reinforce opposition among House and Senate
The proposed tax would exempt U.S. export revenues from
federal corporate tax but levy an implicit 20 percent tax on
imports by preventing U.S. companies from deducting the cost of
imported goods and supplies.
Koch organizations, including the brothers' privately held
conglomerate Koch Industries, have warned that the border
adjustment tax could devastate the U.S. economy by raising
prices on consumer goods, including gasoline.
The groups made their assessment by comparing the value of
each state's 2014 imports to its gross domestic product.
The Koch groups say they support tax reform but oppose BAT.
Refineries owned by Koch Industries rely on oil imports from
(Reporting by David Morgan; Editing by Kevin Drawbaugh and Lisa