WASHINGTON, D.C. – In a speech to the U.S. Chamber of Commerce today, House Ways and Means Chairman Kevin Brady (R-TX) took a strong stand in support of ending the “Made in America” tax on U.S. exports. This bold provision of the House Republican tax reform Blueprint, as Brady explained, will be a “game changer” for American businesses and the U.S. economy as a whole.

Below are Chairman Brady’s remarks on ending the “Made in America” tax as prepared for delivery. CLICK HERE to watch Chairman Brady discuss ending the “Made in America” tax.

How Ending the “Made in America” Tax Will Create New Jobs & Make America More Competitive:

“[F]or the first time in our nation’s history, we will finally end the ‘Made in America’ tax on U.S. exports—a completely backwards feature of our current tax code that makes it harder for U.S. businesses to compete globally and create jobs here at home.

“This policy—sometimes referred to as ‘border adjustability’—is very simple, but it’s also very powerful. It will be a game changer for our businesses and our economy as a whole.

“For decades American companies, large and small, have been competing with one hand tied behind their backs thanks to our unfair, outdated tax code. American jobs are being lost to foreign countries and U.S. companies are urged to move their manufacturing plants, new technologies, and headquarters overseas. Whole communities have been devastated as good-paying jobs continue to leave the U.S.

“Today ‘Made in America’ products and services are at a tax disadvantage here in America and around the globe. That’s because foreign competitors like China, Europe, Mexico, and Canada all adjust their taxes at their borders—adding taxes to American-made products and taking taxes off their own.

“Because America doesn’t border adjust, we lose both here and abroad.

“This means today Chinese steel is cheaper here in the U.S. than American steel. Mexican beef and autos are cheaper than American beef and autos. Foreign oil is cheaper than American oil.

“This tax disadvantage on ‘Made in America’ products and services destroys true competition. Worse, it often means the best location for a U.S. company to sell to America is overseas. Why accept such an unfair and job-killing tax code?”

How It Helps Our Businesses & Workers:

“The House GOP tax reform blueprint finally ends the ‘Made in America’ tax. By border adjusting our taxes like our foreign competitors do, we level the playing field. For the first time in U.S. history, foreign imports and American-made products and services will be taxed at exactly the same rate here in America. No more tax advantages for foreign products or services. No more incentives for U.S. companies to move overseas. Everything taxed at exactly the same rate in the U.S. — what can be more fair?

“More importantly, border adjusting our taxes helps eliminate all tax incentives for U.S. companies to move their manufacturing, technology, headquarters, and jobs overseas. Coupled with the new lower GOP tax rates on local businesses and ending the double-taxation of U.S. earnings overseas, this establishes America as a 21st century magnet for new jobs, technology breakthroughs, and headquarters.

“The GOP tax plan is already driving companies to ask themselves ‘How soon can we bring our suppliers back to the U.S.?’”

How It Works:

“And while it’s new to America, border-adjustability is used throughout the world to give our foreign competitors a big advantage over the U.S. We match them, not with a hidden VAT, but with a simpler, smarter cash-flow tax based on where a product is consumed rather than today’s business income tax based on where products are produced or profits booked.

“This border-adjusted tax is stunningly simple and based on a pro-growth principle: if your product or service is consumed in the United States it is taxed equally. It will bear the same rate of U.S. tax regardless of where it is produced, regardless of whether you’re a foreign company or a domestic one.

“In tandem, if your product, service, or intellectual property is developed here and sold abroad, then your ‘Made in America’ export will no longer be subject to U.S. tax. This change immediately levels the playing field with our global competitors.

“Many of our international companies already deal with border adjustable taxes in the more than 100 countries that currently impose them.

“At the end of the year businesses will add up export sales and disregard them—they aren’t taxable. And at the same time you’ll add up import costs and disregard them—they aren’t counted as deductible expenses. Naturally, businesses are already doing these basic calculations anyway.”

Keeping the “Made in America” Tax = Keeping America at a Major Disadvantage:

“In the end, eliminating the ‘Made in America’ tax is a simple, but powerful action we can take that will dramatically simplify our international tax system and level the playing field for American businesses and workers.

“But make no mistake, there are severe consequences for America if special interests succeed in blocking this provision. Foreign products would continue their tax advantage over ‘Made in America’ products—undercutting President Trump’s focus on American jobs and growth. Tax rates on businesses would have to increase significantly from the proposed 15% and 20% rates, undercutting our ability to make America competitive again.

“But perhaps most importantly, Congress and the White House would have voluntarily left in place the damaging incentives for U.S. companies to move their jobs, research, and headquarters overseas. We cannot let that happen. 

“Our goal is not simply to eliminate all tax incentives to move overseas, our goal is to establish America as a magnet for 21st century investment and job creation.”

CLICK HERE to learn more about ending the “Made in America” tax as well as our other bold reforms to deliver a 21st century tax code built for growth.