Ways and Means Chairman Kevin Brady (R-TX) on Friday joined Charles Payne on Fox Business’ “Making Money” to discuss how ending the “Made in America” tax—a key component of House Republicans’ “Built for Growth” Tax Reform Blueprint— is a “simple and powerful” approach that helps American workers and businesses compete and win around the world. Read excerpts from the interview below.
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Charles Payne: “Tell us the benefits because I know there was a point maybe a week ago or so where President Trump said it was complicated. I look at the schematic of how it would be played out … I think to the average person trying to figure it out it may be.”
Rep. Kevin Brady: “On the surface, but it is actually simple and powerful. We’re proposing a tax code built for growth, for jobs, wages in the U.S. economy. And in doing that leap frog American back into the lead pack to one of the best places on the planet for that next new job or that next new research. And so we are proposing something very simple and it is this: if your product or service is consumed in the U.S. it is taxed at the equal rate of 20 percent. So whether it is from a foreign country or made in America, whether it is from a foreign company or an American company, it will be taxed exactly the same.
“So, it is a powerful approach. And what it does is it mirrors what our competitors—China, Europe, and, yes, Mexico does. They border adjust their taxes. They take their VAT tax off that Chinese product headed our direction, they put it on our American product headed their direction. We are one of the few countries that doesn’t do that. So today they have a tax advantage. Chinese steel is favored over American steel. Mexican beef and autos, for example, have a tax advantage over American beef and autos. Foreign oil over U.S. oil.
“Our approach, which is, if it is consumed in the U.S. it will be taxed at exactly the same rate. It creates a level playing field for the first time for ‘Made in America’ products so you will see true competition. It allows us to simplify the code. But here’s maybe the most important point: That equal taxation eliminates any tax incentive for U.S. companies to move their jobs, their research, or their headquarters overseas. In fact, just the opposite, it really establishes America as a 21st century magnet for new business investment. it is the simple principle but it’s powerful in its impact.
Payne: “I got to tell you. It sounds great. It really does. It sounds like a major step in the right direction.
Brady: “It is. Think of the spotlight that covers the whole stage and then it just focuses on one character. So in the tax code we are taking this complicated international tax system, doing away with it and focusing it down on one country—ours—and asking the simple question: is your product or service consumed in America? If so, it’ll be taxed at the same rate. It is really not only a powerful principle, it levels the playing field and really creates America as a powerhouse, gets rid of this complicated tax code. So when people are talking about imports and exports and all that, at the end of the day, all we are proposing is equal taxation.”
CLICK HERE to learn more about House Republicans’ Tax Reform Blueprint.
CLICK HERE to read “Brady at U.S. Chamber: ‘No more tax advantages for foreign-made products or services.’”
CLICK HERE to view a map of countries that have a tax advantage over “Made in America” products and services because of our country’s broken tax code.