The more Speaker Paul Ryan tries to will the House border adjustment tax into existence as part of corporate tax reform, the more Senate Republicans push back.
Ryan sees border adjustment, which taxes imports 20 percent while exempting exports, as the linchpin of his plan for corporate tax reform. The $1 trillion it would raise over 10 years would help to partially finance a cut in the top corporate rate from the current 35 percent to 20 percent, allowing the House to avoid ballooning the budget deficit.
House GOP leaders thought they heard an endorsement of their idea in President Donald Trump's speech to Congress on Tuesday night. Later they seized on reports that a group of conservatives was told at the White House that the administration backs the House plan.
Not so fast, Senate Republicans say.
For one thing, sources familiar with the matter say Treasury Secretary Steven Mnuchin has told Senate Banking Committee Republicans that he opposes the border adjustment tax.
A Treasury spokesman said Thursday there are "concerns surrounding the proposal" but it has "interesting aspects," adding that Mnuchin is "confident there will be a unified plan between the administration and leadership. The administration will continue to engage CEOs, small business leaders, manufacturers, retailers, and other stakeholders for their input on these issues," the department said.