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President Donald Trump told executives at major retail chains that he would swiftly submit a tax overhaul plan to stimulate the economy.
Trump called rewriting the tax code “one of the best opportunities to really impact our economy,” during a White House breakfast Wednesday morning with chief executives of companies including Target Corp, JC Penney Co and Gap Inc, who came to Washington to discuss their opposition to a House GOP plan to tax US businesses’ domestic income and their imports while exempting their exports. The president said he would be releasing a proposal in the “not so distant future.”
The retailers have argued that the border-adjusted levy will raise prices for US consumers. The chief executives planned to meet with members of Congress later today to deliver the same message.
Trump didn’t address concerns about border adjustments during a photo session at the beginning of the meeting, which reporters attended. Instead, he praised the CEOs as “great retailers” that “I’ve read about on the covers of business magazines.”
He said the retail industry is “very important to the country” and supports “millions and millions of jobs.”
The proposed overhaul of the corporate tax code would reward companies that sell products outside the US while punishing ones that rely on low-cost overseas suppliers — though its supporters say the tax would also lead to a stronger dollar, evening out those affects. The tax would be assessed at a 20 per cent rate on imported goods sold domestically and would replace the current 35 per cent corporate income tax.
The issue has pitted corporate giants against one another, with retailers and other net importers on one side and exporters on the other. For companies on both sides there are billions of dollars at stake.
Supporters say the 20 per cent border-adjusted tax would encourage domestic production. But opponents complain that it would just force companies to pass the increases to consumers — potentially boosting prices for everything from food and clothing to gasoline and auto parts — without spurring a revival of domestic manufacturing.
The potential changes also come at a time when apparel chains and other brick-and-mortar retailers are struggling: About 5,000 stores have been shuttered in the past 18 months, according to Clarion Partners. Department stores such as Sears Holdings Corp and Macy’s Inc have been particularly hard-hit by consumers shifting their spending online.
The retail executives meeting with Trump included Brian Cornell, chairman and CEO of Target; Marvin Ellison, chairman and CEO of J.C. Penney; Hubert Joly, chairman and CEO of Best Buy Co.; and Art Peck, CEO of Gap.
Other retail executives at the White House session included Bill Rhodes, chairman and CEO of AutoZone Inc.; Stefano Pessina, CEO of Walgreen Boots Alliance Inc.; Greg Sandfort, CEO of Tractor Supply Co.; and Jill Soltau, president and CEO of Jo-Ann Fabric and Craft Stores.