June 6, 2017 / 11:16 AM / 2 months ago

U.S. small businesses to lobby Congress to oppose border tax

3 Min Read

A worker stands next to a newly built section of the U.S.-Mexico border fence at Sunland Park, U.S. opposite the Mexican border city of Ciudad Juarez, Mexico January 25, 2017. Picture taken from the Mexico side of the U.S.-Mexico border.Jose Luis Gonzalez

WASHINGTON (Reuters) - About 60 small business owners and a representative from retailer Big Lots will hold meetings with members of Congress this week in an effort to oppose a proposed 'border adjustment tax', organizers said.

Retailers led by large stores including Target, Best Buy and Autozone are trying to get Republicans to abandon the tax as a piece of any sweeping tax reform. The measure would impose a tax on imports while favoring domestic production.

The meetings, which will begin on Tuesday and conclude on Thursday, will include lawmakers and staff from several states including Arizona, Indiana, Ohio and Pennsylvania, focusing on districts represented by members who have not taken a position on the tax or sit on the Ways and Means Committee. They hope to convince them to oppose the tax.

The meetings are the latest effort by retailers to lobby lawmakers to not support a tax they say would increase consumer prices for imported goods.

U.S. House Speaker Paul Ryan has remained a driving force behind the border tax proposal, arguing that economic forces will keep the tax from raising consumer prices.

The future of the tax remains shaky. President Donald Trump has refused to endorse it and many Republicans in the House and Senate are opposed. Furthermore, the effort to pass tax reform has stalled.

Marc Short, the White House director of legislative affairs, said on Monday in a briefing with reporters that tax rate cuts remained a priority, a signal that sweeping tax reform could be dropped in favor of just reducing tax levels.

But Joshua Baca, a spokesman for the coalition opposing the tax called Americans for Affordable Products, said they will continue to fight against it. "The fight is not done. The people who control the process are still very much in favor of the border adjustment tax," Baca said.

Emmett Kelly owns a gun store in Conroe, Texas, in the congressional district of Ways and Means Committee Chairman Kevin Brady, an advocate for the tax. Kelly will travel to Washington to argue tax would be devastating for gun retailers, noting that he imports about 80 percent of his inventory.

"Everybody that I’ve talked to has shuddered when they heard what this border adjustment tax is going to cost," he said.

Peter Sides, owner of the Robert M. Sides Family Music Centers which has five locations in Pennsylvania and New York, said 95 percent of the instruments and accessories sold in his store are imported. A price increase will hit his more frequent customers hardest - families with children with a budding interest in music.

"It all adds up – and it’s not just what happens to us, you’re asking a family to take on the chin a 15-20 percent across-the-board expense increase for anything that’s imported," Sides said.

Reporting by Ginger Gibson; Editing by James Dalgleish

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