A Republican proposal aimed at cutting tax rates and keeping jobs in the U.S. risks hitting the earnings of big U.S. retailers by driving up the cost of imported clothes, furniture and other goods, the Wall Street Journal reported today. Among the companies whose earnings are calculated to take a hit under the so-called border-adjusted tax proposal are Wal-Mart Stores Inc., Costco Wholesale Corp., Genuine Parts Co. and Dick’s Sporting Goods Inc., analysts said. The earnings hit to six big retailers could total nearly $13 billion, according to RBC Capital Markets analyst Scot Ciccarelli, with Best Buy Co.’s annual earnings wiped out. To offset their higher tax bills, retailers would need to increase revenue by raising prices for consumers, he said.
