House Republicans have faced a lot of resistance in their fight to add “border adjustment” to the corporate income tax, which would exempt revenue from exports from taxation and prevent companies from writing off money they spend on imports as an expense. Most economists think the change would do little to hurt big importers, because the value of the dollar would adjust and make imports cheaper enough to offset their higher tax bill.
But you know who thinks that’s nonsense? Importers. They are terrified of this idea, which they think endangers the thin profit margins they typically make from selling imported products. And they’ve formed a new coalition, Americans for Affordable Products, to resist the idea. AAP’s members are a who’s who of strip mall tenants: Walmart, IKEA, Target, Macy's, Kohl's, Sears, Best Buy, Gap, JCPenney, J Crew, Petco, Walgreens, Abercrombie & Fitch, etc., along with manufacturers of imported products (Nike, Toyota), some smaller trade groups, and assorted other import-heavy businesses like AutoZone.
AAP does extensive social media campaigning, warning before Valentine’s Day that border adjustment will make lingerie more expensive:
Go all out and spoil your sweetie this #ValentinesDay, because it could be the last time you can afford to. If the proposed border adjustment tax is enacted, even love will get more expensive. Join us and tell Congress #DontTaxMyValentine! http://bit.ly/StopBAT
Posted by Americans for Affordable Products on Monday, February 13, 2017
And like many interest groups, it set up a booth at the Conservative Political Action Conference (CPAC), where it got young conservative men on camera expressing their worries about rising cigar prices:
Real Americans. Real consequences for #consumer products with bad policy like the proposed #borderadjustment tax. #CPAC2017 pic.twitter.com/mRAK5ahOsE
— AforAffordability (@A4Affordability) February 23, 2017
But AAP has gone a step further in trying to appeal to #teens and #millennials at the conference: It bought a geotagged custom Snapchat filter, accessible to people using the app in close proximity to the conference, which allows people to snap their disapproval of this relatively arcane potential shift in corporate tax policy:
CPAC has an anti-border adjustment tax snapchat filter pic.twitter.com/KuP81ZEESc
— Kevin Glass (@KevinWGlass) February 23, 2017
In a way, this isn’t particularly remarkable. Interest groups always engage in marketing like this; it’s not unusual to see DC Metro ads for military cybersecurity contractors or new fighter jets, intended to sway executive branch officials and congressional aides. The Snapchat filter is motivated by that same theory of change, just with a different technology attached to it.
But it’s also a reminder of how immediate and potent an argument against the border adjustment retailers have. “This policy will make your clothes and food more expensive” is an immediately intelligible, persuasive pitch. “This policy deters tax evasion” (one of the major arguments for the border adjustment) is a bit harder to connect to lived experience.
And proponents can’t easily promote the policy as boosting exports, because a) more Americans consume imported goods than work producing exported ones, and b) the same logic proponents embrace to say that importers wouldn’t be hurt means that exporters won’t be helped. Some exporting companies, like GE, Boeing, and Pfizer, have embraced the policy, but their rationale for supporting it only makes sense if opponents are correct that the tax screws over consumers.
It’s just a Snapchat filter, but it’s also a reminder of how organized and well-financed the forces fighting this policy are, and how quickly they’ve settled on a compelling message to oppose congressional Republicans’ trademark tax policy.
