Despite talk about Republican plans to restart their health care effort, House Ways and Means Committee Chairman Kevin Brady says that tax reform will take center stage.
President Trump has promised to detail a tax plan in the coming weeks. He has not stated whether it is a version of his proposal outlined during the campaign or if it will resemble the House Republicans’ plan. Treasury Secretary Mnuchin said the Trump administration is “primarily focused on a middle-income tax cut and a simplification for business,” which he said is “key to boosting economic growth to 3% annually or higher.” He also stated that the administration has looked at the border adjustment tax (BAT) and is aware of some of the concerns with it.
The BAT is a key provision of the House Republican tax plan, something that has been spoken about favorably by President Trump. However, lawmakers realize its complexity. Specifically, the BAT would end deductibility on import costs, which businesses who largely import goods are opposed to. On the other hand, the plan would allow companies to exclude taxes they received on exports, meaning only revenue derived from inside the United States would be taxable.
The Petroleum Marketers Association of America (PMAA) has initial concerns with the BAT. Refiners who rely heavily on imported crude oil, especially from Canada, could result in higher prices at the pump and higher heating fuel prices in the Northeast and Pacific Northwest.
Throughout the tax reform debate, PMAA will continue to weigh in on provisions that are particularly important to petroleum marketers, such as the estate tax and LIFO. PMAA is still reviewing the BAT and the GOP tax proposal and will have additional information later on how it will impact petroleum marketers.