Border tax spurs Republican-on-Republican attacks

A free-market advocacy group in Washington launched television ads in South Dakota on Wednesday to pressure Rep. Kristi Noem to oppose a cornerstone of the House GOP’s tax reform plan.

The ads aired by the Club for Growth say that costs to consumers would go up by $1,700 a year on the average family if Congress enacts "border adjustment," a proposal to tax imported products while letting domestic producers export tax-free. House Republican leaders, including Speaker Paul Ryan, R-Wis., and Ways and Means Chairman Kevin Brady, R-Texas, see the idea as a way to encourage more domestic manufacturing.

"Washington special interests are fighting desperately to protect a huge tax break that hurts American workers and farmers by favoring foreign products over American-made products," Brady said. "It's a big reason our U.S. jobs are going overseas. House Republicans are closing these loopholes and insisting on fair tax laws so jobs will come back to America."

But the National Retail Federation, which is battling the proposal, developed the study that said prices for consumers would go up $1,700. Some farm groups have also voiced worries about retaliation by countries that import their crops.

Noem is a four-term Republican who serves on the Ways and Means Committee, which is working to craft an overhaul to the corporate and individual tax code. The ad says she has not taken a position on border adjustment plan and encourages viewers to call a number to tell her to oppose it.

Club for Growth President David McIntosh praised aspects of the House GOP tax plan, including lower rates and elimination of estate taxes, but he said border adjustment taxes "will hurt American families." The South Dakota ad buy will cost more than $150,000, and spokesman Doug Sachtlaben said other members of the Ways and Means Committee may also be targeted.

Brady has said he hopes to get tax reform through the House this year. But the chairman of the Senate Finance Committee, Sen. Orrin Hatch of Utah, has said his panel would go its own route.

Whether the two chambers can unite with President Trump on a tax plan remains to be seen.

On CBS' Face the Nation on Sunday, Sen. Lindsey Graham, R-S.C., said Congress was "stumbling" in key areas.

"The House is talking about a tax plan that won't get 10 votes in the Senate," Graham said.