Possible Phase In of Any Potential Border Tax Plan

According to Law360 -- House Republicans may be bending to political pressure over their most controversial proposal to revamp tax laws, with the leader of the chief tax-writing committee in the House of Representatives saying Wednesday that he is “contemplating significant modifications” to the border-adjusted tax plan.

Despite opposition to the notion of the border-adjusted tax, which is aimed at encouraging domestic manufacturing, from the Trump administration, fellow Republicans, the energy industry and import-heavy retailers such as Wal-Mart Stores Inc., House Ways and Means Committee Chairman Kevin Brady, R-Texas, has, until now, remained steadfast in his support for the proposal, which would not tax exports but would disallow deductions for import expenses.

But in an interview with Fox Business News Wednesday morning, Brady indicated that he is now open to ideas to make the proposal more amenable to skeptics.

The proposal has sparked a feud between major American businesses, some of which are in favor of it while others have launched lobbying efforts and attack ads denouncing it as a system that will raise consumer prices on imported products. The destination-based tax system has also raised concerns among trade policy experts and economists that it may violate rules established by the World Trade Organization and spur other countries to take retaliatory protectionist measures.

In past interviews to plug the tax reform blueprint, Brady has repeatedly dug in his heels to defend the border-adjusted tax as one that would help America be more competitive on the world stage while preventing jobs and profits from shifting overseas.

But following the botched efforts last week to repeal and replace former President Barack Obama’s landmark health care legacy, which failed due to a lack of support from within the Republican Party’s own ranks, Brady appears to be more willing to collaborate with the rest of Congress and the White House to avoid a repeat of the health care debacle.

In another interview with Fox Business News on Sunday, Brady indicated that the border-adjusted tax could be phased in while also saying that tax reform efforts would be retroactive to Jan. 1.

Signs of a lack of a unity between the House Republican leadership and the White House remain, however.