WASHINGTON -- The House Republican tax plan, in its current form, appears to be bad news for working Arkansans, U.S. Sen. Tom Cotton said Wednesday.
The proposal calls for cutting the income-tax rate on Americans with the biggest incomes and raising the tax rate on the Americans with the lowest incomes.
It also would place a border adjustment tax on thousands of items that are made overseas and sold within the United States.
The end result, Cotton fears, would be higher income taxes on the working poor and higher prices on all consumers.
Speaking on the Senate floor late Wednesday afternoon, the Republican from Dardanelle said there is widespread concern about the border adjustment tax.
Supporters of the measure, including U.S. House Speaker Paul Ryan, a Wisconsin Republican, say other nations already levy a similar tax on American-made products, putting U.S. producers at a competitive disadvantage.
They say that the border adjustment tax will lead to increased U.S. exports, causing the dollar to rise in value and making overseas products cheaper in American dollars.
As a result, they say, the nation's consumers would see little change in the prices they pay for imported goods.
Cotton said he is "more than a little concerned that these predictions won't pan out."
Supporters say the tax would generate $100 billion a year. It would be coupled with a cut in the corporate income tax from 35 percent to 20 percent.
In an interview, Cotton said he isn't prepared to support or oppose any tax overhaul package until he's seen the final language.
But he warned that the House measure may give many of his constituents a double whammy.
Those in the lowest income bracket would see their rates jump from 10 percent to 12 percent, he said. Those in the highest income bracket, on the other hand, would see their top rate lowered from 39.6 percent to 33 percent.
That means higher tax rates for married couples with taxable income of $18,650 or less. It means sharply lower tax rates for married couples with taxable income above $470,700.
"Working Arkansans may get it coming and going if we go down this road," Cotton said, adding, "At a time when so many working families are still struggling to make ends meet, I don't think we should be increasing their tax rates and increasing the price they pay at Walmart."
None of the members of the Arkansas congressional delegation has endorsed the border adjustment tax thus far. The tax faces opposition from dozens of major retailers who rely heavily on imports, including Wal-Mart and Dillard's.
Other businesses, including General Electric, Boeing, Caterpillar Inc., Oracle and Pfizer, support the border adjustment tax, arguing that it will level the playing field for American-made products.
One of the proposal's supporters, House Ways and Means Committee Chairman Kevin Brady, R-Texas, said in a written statement Friday that the tax is needed.
"One of the best ways to protect the American dream is to tax imports and exports equally in our country. It's time to end the 'Made in America' export tax," he said.
A Section on 02/16/2017