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Phelan M. Ebenhack / AP

A group linked to billionaire brothers Charles and David Koch sent a letter to House Ways and Means chair Kevin Brady, urging Republicans to reverse their support for the border adjustment tax. Americans for Prosperity President Tim Phillips summarizes the Koch network position:

"Border adjustability is nothing more than a tax on American consumers. We are against this approach because in the end, it is making life more expensive for all Americans, especially low-and middle-income families. Instead of picking winners and losers, Congress should pursue a simple, pro-growth approach that lowers rates, eliminates loopholes, simplifies the tax code, and above all, protects consumers from new tax increases."

Why this matters: The border adjustment plan — which would cut taxes on exports but raise them substantially on imports — is central to Paul Ryan's ambitious plans for tax reform. Republicans believe it could raise more than $1 trillion in revenue, helping to pay for Trump's expensive promises like the wall and his massive infrastructure stimulus.

  1. What you need to know about the opposition: This fight could become very expensive and politically brutal. Koch allies will likely include companies in the energy industry — which includes Koch Industries — that will be whacked with new taxes on imported crude. Big box retailers like Walmart, whose cheap prices depend on imported goods, are also allied with the Kochs.
  2. On the other side: An industry group — including GE, Caterpillar and Honeywell, per a source in the room — gathered Thursday AM at GE's offices in Washington D.C. to plan their campaign in favor of the border adjustment tax. This group's (so far unnamed) messaging strategy will draft off of Trump's message of "America First."
  3. The irony is not lost on us: GOP leaders would never have described themselves as nationalists before Trump (and most still wouldn't use that descriptor.) But they're opportunistically borrowing the language of populist nationalism to push a tax policy through.
  4. Congress watch: Our conversations at the Philadelphia retreat this week suggest there is far more support than opposition. Kevin Brady — the man in charge of the tax-writing committee in the House — is pitching it as ending the tax on "Made in America." Paul Ryan is hitting the same notes. A source in his meetings with top administration officials says Ryan is privately calling border adjustment "responsible nationalism."
  5. Trump watch: That's music to the ears of Trump's nationalist chief strategist Steve Bannon, who is on board with the plan and is telling associates the tax reform plan is a "strong American nationalist program." If Bannon vouches for its nationalist credentials, then we'd be surprised if Trump doesn't ultimately endorse it.

Go deeper

Scoop: Trump tells confidants he plans to pardon Michael Flynn

Photo: Alex Wroblewski/Getty Images

President Trump has told confidants he plans to pardon his former national security adviser Michael Flynn, who pleaded guilty in December 2017 to lying to the FBI about his Russian contacts, two sources with direct knowledge of the discussions tell Axios.

Behind the scenes: Sources with direct knowledge of the discussions said Flynn will be part of a series of pardons that Trump issues between now and when he leaves office.

Erica Pandey, author of @Work
4 hours ago - World

Remote work shakes up geopolitics

Illustration: Eniola Odetunde/Axios

The global adoption of remote work may leave the rising powers in the East behind.

The big picture: Despite India's and China's economic might, these countries have far fewer remote jobs than the U.S. or Europe. That's affecting the emerging economies' resilience amid the pandemic.

Trump gives Biden access to presidential intelligence briefings

Photo: Mark Makela/Getty Images

The Trump White House on Tuesday gave President-elect Biden access to daily presidential intelligence briefings, a source familiar with the matter tells Axios.

Why it matters: Trump has refused to share the briefs until now, as he continues to challenge the result of the election and declines to concede. The president's acquiescence comes as another sign that the transition to a Biden administration is taking place.

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