Michigan would take ‘hardest hit’ from border-tax plan

Bloomberg

Michigan, a state critical to Donald Trump’s presidential win, would be the hardest hit by a proposed 20 percent tax on US companies’ domestic sales and imports, according to a study released by conservative groups associated with billionaire brothers Charles and David Koch.
The report, which used federal tax, labor and census data, was commissioned by Freedom Partners and Americans for Prosperity. Both have lobbied against the so-called border-adjusted tax, while supporting comprehensive tax reform.
The proposal for border adjustments — part of a tax overhaul plan backed by House Speaker Paul Ryan of Wisconsin and House Ways and Means Committee Chairman Kevin Brady of Texas — is driving a wedge between the mega donors and some of their traditional political allies. The Koch-backed groups say the tax would mean higher costs for retailers and other industries that rely on imports, including Michigan’s automakers.
The study, released Thursday morning, compared state imports to overall economic activity to show how sensitive each might be to an tax on imported goods. Those most affected, because of their higher level of imports as compared to gross domestic product, were found to be Michigan, Louisiana, Tennessee, New Jersey, Kentucky, South Carolina, Illinois, Texas, Georgia and California. Like Michigan, eight of the top 10 states listed in the study are home to auto assembly plants. Ryan’s home state of Wisconsin ranked 29th, while Brady’s Texas was eighth.