Bannon Now Backing Ryan, Border Tax On Foreign Goods To Support America’s New Defense
House speaker Paul Ryan is not new to politics. In the new Trump administration, Ryan has been known to disagree with some of the incoming White House staff, but now it seems that he is making peace with Chief Strategist Steve Bannon and joining forces on a very important issue.
Ryan has drawn up a plan to pay for corporate tax cuts by implementing a border-adjustment tax on goods that are made outside the U.S., but sold within the country.
Ryan’s proposed plan has already received support from figures in the Trump administration, such as Stephen Miller, a senior Trump policy aide; Chief of Staff Reince Priebus, a longtime ally of Ryan’s; Commerce Secretary Wilbur Ross; and trade adviser Peter Navarro. Even Jared Kushner, a senior adviser and Trump’s son-in-law, is considering his support for the plan. He hasn’t made up his mind, but Kushner’s nod, in conjunction with Bannon’s, would help Ryan gain Trump’s support more easily.
During the 2016 election season, Bannon’s media outlet, Breitbart, was very critical of the House speaker. The site claimed he was soft on crime and border security, as well as a secret supporter of Hillary Clinton. This caused Ryan to respond with equal disdain for Bannon.
Since Trump’s win, Ryan has spoken more positively about the chief strategist. In an interview with PBS Newshour, Ryan told said of the chief strategist, “We’re different kinds of conservatives, that we can safely say, I think. But we’re serving a purpose, which is to get this agenda passed, and on that agenda that we’ve rolled out, that we ran on, on that we agree. So I see a person that I have a common cause and purpose with.”
The border tax proposal could boost production of American-made goods. This is something Bannon has supported since joining Trump on the campaign trail last year. The rise of products stamped ‘Made in America’ would be in line with the protectionist strategy Bannon has been pushing alongside Trump for quite some time.
The proposed ‘Ryan Plan’ would enforce a 20 percent tax on imports for companies in the United States, while their exports would cost nothing. This would replace the current 35 percent tax on companies’ global income. The plan is also meant to extinguish the existing incentive for businesses to operate outside the U.S., and instead encourage them to keep their operations in the country and bring back manufacturing jobs.
Corporate and individual tax cuts were merely a dream of speaker Ryan’s until Trump made the promise to implement them during his campaign. The expectation that Trump set has also been one of the main reasons behind the rise of the stock market since he won the election last November.
The tax is estimated to raise about $1 trillion in the first decade, which Ryan and other supporters say is needed to help pay for other tax cuts for U.S. businesses and individuals. To be considered under the reconciliation maneuver, which would allow the Senate to bypass the usual 60-vote threshold and pass it with only GOP votes, the tax bill must reduce the deficit or be revenue-neutral. If the plan were introduced as regular legislation, the Democrats in Congress would most likely filibuster and delay its passing. Ryan has informed other Republicans in Congress that if they don’t use border adjustment to raise revenue, they cannot implement their desired tax cuts under reconciliation.
There has been a lot of opposition from companies that currently rely on imported goods and services, like Wal-Mart, Nike, and Toyota Motor Corp. For them, if the bill passes, they will be forced to either raise their prices on the goods they sell or take a cut in their overall profit if they want to continue conducting business like they do. Even billionaire investor Warren Buffett has criticized Ryan’s plan, saying it “would be a big sales tax” and that it would hit “items that are not yachts or anything like that; they’re things that the ordinary person buys.”
National Economic Council director Gary Cohn and Treasury Secretary Steve Mnuchin are opposed to the plan. Cohn and Mnuchin, who, like Bannon, also come from the Goldman Sachs Group, have joined other critics in saying the plan would be disruptive to trade, consumer prices, and global commodity markets.
Mnuchin has gone on record with his opposition, stating that after looking over the proposed plan, he had some concerns. Cohn, the former president and CEO of Goldman Sachs, is currently working on a tax plan for Trump in the White House. He has spoken about his meeting with members of Congress to discuss tax cuts for corporations and individuals, but has yet to address the border adjustment tax directly.
Ryan has also received criticism from the Koch brothers through Americans For Prosperity, a conservative advocacy group they fund.
Even with the likes of Bannon and other key White House staffers on his side, Ryan knows that it will all be in vain if he can’t convince President Trump to support it. In the beginning, Trump referred to the plan as “too complicated,” but the POTUS has more recently sounded a little more optimistic when discussing the possibility of creating more jobs with the plan.
White House press secretary Sean Spicer said the plan would be beneficial for all Americans. “It’ll actually benefit consumers, benefit workers, and benefit our economy,” Spicer told reporters during a press conference on Feb. 23. “We are probably one of only a handful of developed countries that don’t have a tax system that looks at this.”
Ryan seems ready to take on any resistance during to the biggest tax overhaul in over 30 years. He has hinted at the expected drama by saying the process is “going to be up, it’s going to be down, it’s going to be on, it’s going to be off.”
By recruiting Steve Bannon, and possibly President Trump as well, to his team of supporters, the speaker may not have such a hard time pushing his plan through.