Senator Rand Paul (Andrew Harrer/Bloomberg )
President Trump and Sen. Rand Paul are working on legislation that would create new incentives for companies to keep jobs in the U.S. and punish those that move overseas, both men said on Tuesday.
Precise details of the legislation could not be learned, and it’s unclear whether it is close to being introduced or still in the drafting stages. But Trump and Paul said it has been in the work for a while and kept under wraps.
“Economic-development incentives for companies,” Trump said in a Forbes interview published Tuesday. “Incentives for companies to be here.”
Forbes quoted Trump as saying U.S. companies that move operations to other countries would “get penalized severely…It’s both a carrot and a stick.”
Trump added that the punishment would be making it “very tough for you to think that you’re going to be able to sell your product back into our country.”
Paul, in a Twitter post shortly after the Forbes interview published, wrote “This will be a great plan & a big deal for millions of Americans. I’ve been working with @realDonaldTrump for months on this. Details soon!”
— Senator Rand Paul (@RandPaul) October 10, 2017
Trump has been threatening a version of this since he was a candidate in 2015, saying he would impose tariffs or some type of tax that penalizes U.S. companies that move overseas and then try to sell their goods back into the U.S. But senior administration officials have never followed through on the plan, and it was not included in his recent tax cut package that he is trying to nail down with Republicans in Congress.
The imposition of such tariffs or taxes has split the business community, with some domestic manufacturers saying it would be a good idea and multinational companies worried that it could drive up their costs.
There is no indication yet whether Speaker of the House Paul Ryan (R – Wis.) or Senate Majority Leader Mitch McConnell (R – Ky.) have been involved in discussions about the plan or will allow a vote on the measure. Trump could try and add it to the tax package he hopes to have on the House and Senate floor later this year as a way to ensure Paul’s vote. Paul has voiced concerns that the tax plan, as currently designed, would lead to a giant tax cut for the rich and a possible tax increase for some in the middle class.
But imposing new penalties for companies that move operations overseas could reignite a messy fight that a number of business groups thought they had recently settled.
Retailers, automotive companies, and a number of other firms led Republicans to strip a provision out of the GOP tax plan that would have essentially raised taxes on items imported for sale into the U.S. The provision, often referred to as a border-adjustment tax, was designed in part by Ryan, and it would have created incentives for U.S. companies to export more goods, while also raising around $1 trillion in new revenue over 10 years. But opposition from businesses and even several top officials within the Wite House killed the idea.