Congress

This small business owner says he can’t survive a Republican plan to tax imports

U.S. Rep. Tom Rice leads a town hall-style meeting at Boulineau’s in Cherry Grove Beach on Aug. 6, 2014.
U.S. Rep. Tom Rice leads a town hall-style meeting at Boulineau’s in Cherry Grove Beach on Aug. 6, 2014. jblackmon@thesunnews.com

Tee Miller’s clothing shop in Georgetown, South Carolina, survived the city’s worst fire since 1841, a massive blaze that received national media attention and nearly leveled an entire city block on the historic waterfront.

But Miller, the owner of Black Mingo Outfitters, a shop that sells high-end outdoor clothing brands like Patagonia and Vineyard Vines, isn’t so sure he’ll be able to survive a proposed tax on imported goods championed by House Speaker Paul Ryan, R-Wis., as a way to pay for an overhaul of the nation’s tax system.

“Most apparel is made overseas nowadays,” Miller said. “It’s already a tough market to be in.”

The border adjustment tax would levy a 20 percent tax on imports that proponents say will raise $1 trillion over 10 years.

Miller is part of a group of small business owners who are headed to Washington on Tuesday as the proposed tax receives its first hearing in the House Ways and Means Committee, the group tasked with overseeing the nation’s tax system.

He plans to meet with Ways and Means committee member Tom Rice, R-S.C., his congressman, to voice his displeasure with the proposed tax.

“The way I understand it, it’s not going to have anything good for me,” Miller said. “It’s the same thing for our customers. . . . You can’t buy as much.”

Miller said he’d supported Rice in the past and wanted to see the nation’s tax system changed but that the tax on imported goods would cut into his clothing business’ predetermined markups. In order to make ends meet, he’ll have to cut his staff of four to five employees and raise prices, he said.

Rice did not respond to a request for comment.

The group that’s organizing the efforts of small business owners is Americans for Affordable Products, a coalition of over 500 businesses and trade associations in favor of overhauling the tax code but opposed to the border adjustment tax. They plan to meet with four or five of the Ways and Means committee members this week, with a larger push on Capitol Hill in June.

“The hearing on Tuesday really provides an opportunity to show members of Congress that the border adjustment tax is just a bad bill,” Americans for Affordable Products spokesman Joshua Baca said. “It’s a bad idea, and the more they hear about it the more they dislike it.”

Another small business owner headed to Washington is Glenn McKee, the owner of Games by James, a small chain of board game shops in Minnesota. He plans to tell Rep. Erik Paulsen, R-Minn., that a border adjustment tax will force him to raise prices or go out of business.

“If my cost of sales went up 20 percent and nothing changed, it would take away all my profits and I would have no choice but to raise retail prices or go out of business,” McKee said.

Recent events seem to indicate that the border adjustment tax faces a bleak future in Congress. A slew of senators have voiced their opposition, and Ryan acknowledged during a news conference Thursday that the fate of the tax is uncertain in the House of Representatives.

“I do believe that there are very serious and legitimate concerns to any version of tax reform,” Ryan said. “We’re going to have to accommodate those concerns as we move to a new tax system.”

Last week, the South Carolina Republican Party approved a formal resolution opposing a border adjustment tax.

“The South Carolina Republican Party State Executive Committee adamantly opposes the border adjustment tax that would raise taxes on American imports by as much as 20 percent and could destroy thousands of jobs in South Carolina,” the resolution said.

President Donald Trump has remained largely silent on the tax, and the White House did not address the issue when it released a broad tax plan last month.

Ways and Means Chairman Kevin Brady, R-Texas, said he wanted to pass a tax overhaul plan by the end of the year.

Donovan Harrell contributed to this article.

Alex Daugherty: 202-383-6049, @alextdaugherty

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