Target CEO to Congress: A Border Adjustment Tax is a bad idea

WASHINGTON — Target CEO on Tuesday testified before a House of Representatives committee to discuss why the proposed Border Adjustment Tax, which taxes imports 20% while exempting exports, is a bad idea.

"Under the new border adjustment tax, American families — your constituents — would pay more so many multinational corporations can pay even less," he testified.

The retail CEO added the U.S. tax code is “broken,” and noted the BAT would more than double the retailer's tax rate to 75%, making it difficult for Target to invest in hiring workers and opening new stores in the United States.

“It's simple math," Cornell testified. "If the government takes nearly four out of every five dollars we make... there's no capital to invest and no prospects for growth. And that matters a lot. Both to us and to the American economy. Instead of investing and creating American jobs, we’d be pushed in the other direction." 

In an interview with Bloomberg after his testimony, Cornell that all of Target’s stores are the U.S., serving 30 million shoppers every week. “As we’ve looked at the new Border Adjustment Tax, our concern is those families are going to pay higher prices for basic essential items. The clothing they need, the back-to-school supplies; a lot of household essentials. We want to make sure that Congress understood our point of view that the committee understood our concerns with the unintended consequences.”

Trade associations issued statements following Cornell’s speech.

“Target CEO Brian Cornell made clear today to members of the U.S. House Ways and Means Committee willing to listen that America’s businesses and the workers they employ will be irreparably harmed by a poorly conceived policy that rewards profitable, multi-national companies, while punishing middle-income households,” said Joshua Baca, spokesperson, Americans for Affordable Products. “The Border Adjustment Tax is deeply flawed and based on assumptions that Mr. Cornell demonstrated are highly questionable and filled with dangerous assumptions. It is time for Congress to heed the concerns expressed by employers in their districts and the constituents they represent, and set aside the Border Adjustment Tax so that the hard work of reforming our nation’s outdated tax code can move forward in earnest.”