MN03 Erik Paulsen Pushing Tax Policy Changes That Could Mean More Jobs in El Salvador

Here are some heart-warming tweets from Congressman Erik Paulsen showing his appreciation for outdoor sports.

Thus it wasn’t a surprise to see that “Representative” Paulsen is sponsoring H.R. 3645 – the “U.S. OUTDOOR Act”.

Now, if you think this legislative proposal is to encourage parents to participate in outdoor sports with their children, well … NO …. H.R. 3645 is actually “United States Optimal Use of Trade to Develop Outerwear and Outdoor Recreation Act”.

Not a surprise, because this legislative proposal is actually a tax policy change … and like so many tax cuts that “Representative” Paulsen promotes will not likely be passed down to the consumer but could be a nice windfall for corporations.

What “Representative” Paulsen wants to change is the tariff on recreational performance outerwear (e.g. a knit performance outerwear jacket is subject to a 28% tariff).

Surely, you remember when Congressman Paulsen issued his recent tweet during the Trump Made In America Week promotion

Yeah … Made in America can only be made better if it is Made in Minnesota … and ya gotta suspect that the good folks at Wintergreen Northern Wear in Ely, sure wish they coulda got a shoutout from Congressman Paulsen

Wintergreen Northern Wear, based in the north woods of Minnesota

Or, maybe Clarkfield Outdoors

Clarkfield Outdoors in Clarkfield MN

Wintergreen Northern Wear and Clarkfield Outdoors are just some of the small businesses that produce American-made outerwear.
So is the self-described “champion of small business” pushing a tax policy change that will help them and their employees ?

NO, “Representative” Paulsen is pushing a bill to provide tariff relief … actually to eliminate it.
Specifically, the legislation would make “recreational performance outerwear” (such as, paddling pants, ski or snowboard pants, overalls and bib overalls, jackets, padded sleeveless jackets, and windbreakers) “more affordable for American consumers, encourage participation in outdoor activities, create jobs, and help designers and retailers of performance apparel better compete in the global economy.”
Technically, this is tantamount to a “tax cut” since American outdoor retailers currently pay millions of dollars in duties by importing these products from other nations … instead of selling Made-In-The-USA products and supporting American workers.

For example, consider outerwear sold with The North Face label … made in El Salvador.

For discussion sake, let’s accept that an average textile worker in the United States earns about $37,000 a year and The North Face sources from 33 countries.
For comparison, a report from 2008 indicates that women in El Salvador “are paid only 94 cents for each jacket they make, which goes for $165 retail“. The report also includes warnings over human rights abuses in El Salvador — harsh and humiliating treatment of women including forced overtime, excessive production goals, sexual harassment, 100 degree temperatures, and firing of workers daring to organize a local union.

And as voters will surely recall from the last presidential campaign that candidate Donald Trump was criticized for using overseas manufacturing for items in his Donald J. Trump Signature Collection of suits and ties.
Yep, just part of the Trump “that’s business” philosophy.

Now, TrumpPocketProtector “Representative” Paulsen wants tariff relief, raising a couple of questions:
Will companies pass those savings on to consumers ? And in doing so, cause harm to America’s small businesses that produce USA-made products ?
Further, as imported products gain more market share, will corporations increase production in overseas facilities — like El Salvador — further making it more difficult for American small businesses to survive ?

Another aspect of “Representative” Paulsen proposal is that it is specific to the product — recreational performance outerwear.
Imported shirts, shoes, and other items of clothing are subject to a tariff and ultimately the final cost of the tariff tends to fall on American consumers. For that reason, tariffs are often considered a regressive tax, since price increases tend to hit low-income Americans the hardest. But the Paulsen-proposed H.R. 3645 – the “U.S. OUTDOOR Act” only impacts recreational performance outerwear … which means that tariffs will still be applied to your new pair of sneakers or dress shirt but not a pair of ski pants.
What does it say about “Representative” Paulsen focus ?

Lastly, for the #MathGuy, shouldn’t Congressman Paulsen acknowledge that the government is funded by a combination of taxes … including over $40 billion collected in excise taxes … and if there is a change in revenues collected, the national debt will impacted … so where is the offset ?

There are questions that Congressman Paulsen should answer … maybe in a town hall … but he might be too busy accepting checks from the OUTDOOR INDUSTRY ASSOCIATION PAC which is pushing his legislation.

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