Report: SC would be among the states hurt most by proposed border tax

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South Carolina is one of the states that would suffer the most under a proposed 20 percent tax on imports into the United States, according to a new report from a libertarian advocacy group.

The so-called “border adjustment tax” is part of a tax-reform plan favored by some House Republicans, including Rep. Kevin Brady of Texas, chairman of the Ways and Means Committee.

Proponents say it would level the playing field for American manufacturers and discourage U.S. companies from sheltering profits overseas. A strengthening of the dollar would make imports cheaper, offsetting the effect of the tax on U.S. companies that import, they say.

The study by Americans for Prosperity, however, found that South Carolina is among the six states that would be most negatively impacted by the border tax because imports make up nearly 20 percent of its GDP. The report also says nine of the 10 most-affected states, including South Carolina, make a lot of cars.

Taxing imports at 20 percent “would be devastating for domestic automakers that rely on an integrated supply chain for components and vehicles made in the United States,” according to the report, which AFP —a political advocacy group founded by businessman and political activist David H. Koch — prepared in conjunction with the Freedom Partners Chamber of Commerce.

A spokesman for the American Made Coalition, which supports the border tax, said the study doesn’t take into consideration the entire tax-reform plan, which includes a $2 trillion tax cut.

“Our current tax system is outdated and gives foreign importers, including the sponsors of this report, a huge leg up over American manufacturers,” a spokesman for the American Made Coalition said in a statement to UBJ.

According to U.S. Sen. Lindsey Graham, the border tax doesn’t have enough support to pass the Senate. Graham told CBS’ “Face the Nation” in February that the idea “won’t get 10 votes” in the upper chamber.

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