Letter to the Editor: Border Adjustment Tax is poor policy

Gary Cammack. Courtesy photo

By Gary Cammack
Union Center, S.D.

Editor’s note: Gary Cammack is a business owner, rancher, state senator and president of the South Dakota Retailers Association.

A proposal circulating in the U.S. House of Representatives could have a devastating impact on consumers, small businesses, family farmers and ranchers.

The Border Adjustment Tax (BAT) would impose a new, $1 trillion national sales tax on goods shipped into the United States. Manufacturers would add the cost of the tax to the price retailers pay for those products, and retailers would pass the increased cost along to consumers in the form of higher prices.

We are asking South Dakota Congresswoman Kristi Noem to stand with us against this proposal. As an experienced rancher, farmer and local business owner, she fully understands that government tax and regulatory policies can either make or break business owners and their employees, and can tip the balance for family farmers and ranchers.

Retailers would be vulnerable because, when prices rise dramatically, shoppers cut back. That would in turn lead to cuts in staffing. Small businesses provide nearly one out of every four jobs. In South Dakota, retail establishments support more than 134,000 jobs. A tax hike of that magnitude would put many of those jobs at risk.

If this tax is enacted, farmers and ranchers would be hit by increases in prices they pay on goods needed to run their operations. At the same time, other nations would likely retaliate by imposing tax hikes on U.S.-produced goods being shipped to their countries. Since a high percentage of the products raised by South Dakota farmers and ranchers are exported, that could put our producers at a terrible pricing disadvantage compared to producers from other nations. It would also mean that products intended for export would instead be on the market here. A glut of American farm products would drive prices down for farmers and ranchers, a hit they can’t afford. In addition, supporters claim it will strengthen the dollar 20 to 25 percent. That would be absolutely devastating for agricultural trade with our trading partners around the world.

But, as is true with almost any Washington, D.C., tax hike, the middle class would pay the ultimate price of bad policy. While we don’t agree with the negative ad blitz being conducted by an out-of-state group, we do agree that working families would endure higher prices if this tax is enacted. This significant loss of disposable income for South Dakota families would have a ripple effect throughout our entire economy, threatening businesses in almost every industry and destroying jobs.

We support tax reform. We just don’t think that reform that results in higher prices is good policy.

As a member of the tax-writing Ways and Means Committee in the House of Representatives, Rep. Noem can play an important leadership role in protecting South Dakota’s economy, middle class families, and ag economy. We hope she will continue her support of local South Dakota businesses, farmers, ranchers and consumers by opposing the BAT.

We trust in Rep. Noem’s track record and hope she will continue to fight for South Dakota small businesses, farmers, ranchers and families.