Here are five things to know.
1. While some people interpreted Mr. Spicer’s remarks as a border tax, the proposal actually stems from a plan presented by House Speaker Paul Ryan, R-Wis., that incorporates a border adjustment tax, rather than an ordinary tariff, according to the report.
2. A border adjustment tax is a tax levied on goods based on where they are sold, not where they are produced, according to Investopedia. Goods that are imported and sold in the U.S. are subject to the tax, while goods that are exported are exempt.
3. At present, U.S. corporations pay a 35 percent tax on global profits. Rep. Ryan’s proposed tax plan would lower the tax on domestic revenue to 20 percent, creating a system that favors exports over imports, according to CNBC.
4. The proposed tax plan is controversial for many U.S. retailers, as large shares of their products are imported.
5. When CNBC asked AshLee Strong, a spokeswoman for Rep. Ryan, about Mr. Spicer’s comments, she said, “We have been and continue to be on the same page about tax reform that supports American jobs and American goods.”
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