A “border-adjusted tax proposal” floated last summer by Republican Speaker of the House Paul Ryan (R-WI) and touted by President-elect Donald Trump during and after the presidential campaign could hit retailer earnings by driving up the cost of imports, analysts told The Wall Street Journal.
The proposal includes a lowered 20% corporate tax rate, a switch to a territorial system, and the so-called “border adjustments” (taxes on imports but not exports), which proponents say will deter U.S. companies from instituting so-called inversions. For most large retailers, the lower tax rate won’t sufficiently make up for lost sales due to the higher prices wrought by import taxes, analysts said.