Border adjustment foes hope Paul Ryan abandoning idea for lower tax rates

Top opponents of House Speaker Paul Ryan's plan to adjust corporate taxes at the border claimed that his tax reform remarks Tuesday were the start of a pivot away from the controversial idea Tuesday and suggested that simple corporate tax rate cuts might be a sufficient alternative.

Ryan conspicuously skirted the issue of border adjustment in a heavily promoted speech at the National Association of Manufacturers, instead choosing to say that there are a "number of ways" of achieving the provision's goal.

The goal in question is eliminating the incentives that U.S. companies face to move their headquarters into tax havens. Ryan and House Republican leaders have said that border adjustment would end all motives for doing so. The plan would change the current practice of taxing businesses on profits, wherever they are earned, and instead tax sales based on the destination.

It would work by exempting export sales from taxation, but disallowing companies from deducting the cost of imported goods from their taxable income.

Retailers and other industries pushed back fiercely against the concept in recent months, fearing that it would effectively result in a tax on their imports. Border adjustment supporters maintain that the dollar would appreciate in response to the new tax system, canceling out the import tax through greater purchasing power.