New Survey: Consumers Oppose Higher Prices Resulting from Border Adjustment Taxposted January 10, 2017
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New Survey: Consumers Oppose Higher Prices Resulting from Border Adjustment Tax
Voters Want Spending Cuts vs. Increased Costs for Consumer Goods to Pay for Tax Reforms
Wednesday, January 11, 2017 – The US Consumer Coalition (USCC) today released the results of a new survey finding that voters are very concerned about the potential impact of a border adjustment tax (BAT). The BAT was included as part of the House Republican tax reform blueprint that was released in 2016 and is set to serve as the foundation for reforms to be considered in Congress in the coming months.
The basic premise of the BAT is that U.S. imports would be taxed at a new 20 percent rate, while U.S. exports would not. As a result, one of the major implications of a BAT, according to opponents, is that the cost of the new tax will likely be passed on to consumers in the form of higher prices for everyday goods and services, as many products that Americans rely on daily are manufactured almost exclusively overseas. The BAT is estimated to raise roughly $1 trillion in new taxes, revenue which is slated to be used to offset other tax reforms such as reducing the corporate tax rate from 38.9 percent to 20 percent.
With no data publicly available on the perspectives of American consumers and voters, the U.S. Consumer Coalition commissioned a survey to understand how consumers view potential tax reforms both generally and the BAT specifically. The nationwide survey was conducted by Morning Consult on behalf of USCC from December 18-20, 2016, among a sample of 5,500 registered voters. Findings include:
- Voters want Congress to prioritize tax reforms for individuals and small businesses (38%), eliminating corporate loopholes (24%), raising taxes on the wealthy (23%) and lowering corporate tax rates (6%) respectively.
- 61% of voters say reducing federal spending is the best way to offset the cost of any tax reductions versus higher taxes in other areas.
- Nearly 60% of voters believe a border adjustment tax would hurt working families, consumers, retailers and small businesses, with 26% responding “don’t know / no opinion”.
- 50% of voters agree that Congress should look at other ways to offset the cost of a corporate tax rate reduction rather than imposing a border adjustment tax.
- 45% of voters would not be willing to pay any more at all for consumer products, with only 17% of the electorate unwilling to pay over 5% more, to implement a border adjustment tax.
- 42% of voters said their member of Congress would be putting the interests of corporations over consumers and small businesses if they supported a border adjustment tax.
- Nearly half of voters consider any new tax that raises prices on consumer goods as a broken campaign promise.
“What our survey found is that voters overwhelmingly prefer that Congress look at other means, such as decreasing government spending, to pay for any tax reforms rather than creating new taxes in other areas like a border adjustment tax,” said Brian Wise, president of the US Consumer Coalition. “In short, voters are not willing to pay more for everyday consumer goods in order for corporations to get a tax cut. While the BAT would come at a high price for consumers, the real cost will be a political one if Members of Congress put corporate profits above the interest of American consumers.”
The interviews were conducted online and the data were weighted to approximate a target sample of registered voters based on race/ethnicity, gender, educational attainment, and region. Results from the full survey have a margin of error of plus or minus one percentage point. More information on the poll can be found at noconsumertax.org/poll.
About US Consumer Coalition
The US Consumer Coalition (USCC) is a consumer advocacy organization that promotes expanded consumer choice, responsible regulation of consumer-facing industries, fair market conditions, and consumer freedom.