A Koch Industries-funded report warned on Friday US gasoline prices would rise if Congress passed a Republican proposal to adjust US corporate tax rates to favour exports over imports, escalating a lobbying battle over the measure. The report by energy consultant Philip Verleger surfaced a week after the private conglomerate, controlled by conservative billionaires Charles and David Koch, predicted the Republican measure called "border adjustability" would devastate the economy.
The actions are unusual for the Koch brothers, who spend heavily in elections to support Republicans and conservative policies. They are part of the early lobbying salvo by a range of industries that hope to eliminate the measure as President-elect Donald Trump and the Republicans in Congress edge toward agreement on a tax reform agenda for 2017. Analysts said the specter of higher gasoline prices could prove embarrassing for Trump, who supports the energy sector and has nominated prominent industry advocates to top cabinet positions, including Exxon Mobil Corp Chief Executive Rex Tillerson as Secretary of State.
Border adjustability would exempt US export sales from corporate income tax but impose it on imported goods including crude oil used by US oil refineries. The measure is included in a larger tax reform blueprint backed by Republicans in the House of Representatives, who say it would greatly expand economic growth and job creation.