Top Republicans driving the GOP tax reform effort have given up on border adjustment.
“While we have debated the pro-growth benefits of border adjustability, we appreciate that there are many unknowns associated with it and have decided to set this policy aside in order to advance tax reform,” House, Senate and White House leaders working on a tax plan said in a statement Thursday.
The officials added that they expect a bill to start moving through relevant committees “this fall,” reiterating an earlier timeline.
The Thursday statement outline broad principles for the Republican tax reform effort: simplifying the tax code, lowering rates for corporations and small businesses and cutting the burden on middle-class Americans. But it did not offer new details on possible corporate or income tax rates, revenue neutrality or other specifics that could be included in the joint tax plan.
The officials who issued the statement — House Speaker Paul Ryan, Senate Majority Leader Mitch McConnell, Treasury Secretary Steven Mnuchin, National Economic Council Director Gary Cohn, House Ways and Means Committee Chairman Kevin Brady and Senate Finance Committee Chairman Orrin Hatch — have recently been meeting to strike a joint plan that the GOP wants to push through Congress this year.
The border adjustment proposal was a key revenue-raising plank of the plan House Republicans unveiled last year. It taxes imports but lets exports go untaxed.
Retailers that get many of their inputs from overseas raised concerns about the proposal and said it would pass costs on to consumers. Numerous senators also raised concerns about the provision, leading to doubts in recent months that it could become part of a joint tax proposal.
This story is developing. Please check back for further updates.
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