by Mitch Kokai
Senior Political Analyst, John Locke Foundation
Oil refiners may be taxed more and drivers may see higher taxes at the pump if the House Republican tax plan becomes law, lobbyists and analysts have realized upon sorting through its provisions.
Those groups could be among the “losers” created by the overhaul plan, which Republicans defend as being meant to stimulate overall economic growth and cut down on inequities in the tax code. While the several moving parts of the plan make it difficult to say for sure whether any given group would be harmed, some energy producers have expressed concern about the plan’s border-adjustment feature.
Republicans hope the border-adjustment proposal would, at once, eliminate companies’ incentives to move their headquarters overseas, stop the offshoring of jobs and silence calls for tariffs, and raise about a trillion dollars to pay for corporate tax rate reductions.
Instead of the current complicated and broken system for taxing the international profits of corporations, corporate cash flows would be taxed based on whether sales came in the U.S. or outside it. Accordingly, businesses would be able to deduct exported goods from their taxable revenue but would not be able to deduct imported goods that they use in making products for sale in the U.S.