Republicans want to lower corporate taxes, but in a way that rewards companies that make things in the U.S. and export them abroad, while also taxing companies that make things in foreign countries for sale in the U.S.
A border adjusted corporate tax would reduce taxes on exports while raising them on imports. A House Republican proposal to create this tax could raise more than $1 trillion and allow the overall corporate tax rate to be reduced to 20%.
Why it matters:
The Republican Party is on the hunt for policy ideas that would raise money and appeal to the white working class while not betraying anti-tax principles. Border adjustment would increase revenues while shifting the tax burden from companies that support domestic employment to those that do business abroad. They won't get there without a fight, as powerful industries like retailers that face higher taxes will wage all-out war against it.