One week ago, we wrote that "Two Wars Are About To Break Out Over Border Adjustment Tax": one of which would include a group of opposing Republican Senators (and their lobbyists), and US retailers and importers, and a second which would be waged between the US and all of its major trading partners.

Today, the war against BAT fired its first salvo, when the previously profiled Senator David Perdue of Georgia, former CEO of discount retailer Dollar General, emerged as the top Republican critic of the House GOP plan to adjust business taxes at the border, threatening the divisive proposal's legislative prospects. Unlike other members of the upper chamber, Perdue has harshly criticized the tax idea in the press and actively tried to sway his colleagues against it.

In a letter issued on Wednesday, Perdue wrote that "this 20-percent tax on all imports is regressive, hammers consumers, and shuts down economic growth."

Perdue said he supports three of the major ideas in the House Republicans' plan: simplifying the individual tax code, lowering the corporate tax rate and making it easier for companies to bring foreign earnings back to the U.S. But he said that the border-adjustment tax would raise consumer prices.

"This would hammer consumer confidence and lower overall demand, thus putting a downward pressure on jobs," he said.

In addition to his letter, Perdue also spoke with Yahoo Finance, and called the border-adjustment feature of the House GOP plan "a regressive tax. It hammers low-income and middle-income people. It doesn't foster growth."

As detailed on various previously occasions, the border-adjustment proposal would exempt exports from the corporate tax in addition to taxing imports. Supporters of the proposal argue that it would remove incentives for companies to move job overseas. They also argue that it will not hurt prices because the U.S. dollar would strengthen.

Perdue warned that even if the currency adjusts, "we end up with more losers than winners." He said that a currency adjustment would lower the value of U.S. investors' foreign investments. "American seniors will see their retirement savings evaporate at the same time their living costs increase," he said.

A recent analysis by JPM calculated the specific industries that would see the most adverse exposure from a BAT.

Should a Border Adjustment Tax not lead to an offsetting surge in the dollar as some expect will happen, retailers will get crushed.

It is not surprising that a former Dollar General CEO would be concerned.

Perdue is not the only Republican lawmaker who has expressed concerns about the border-adjustment proposal. As we noted last week, Senator Mike Lee of Utah told Koch network donors: "This ends up becoming a VAT-like substance and I think it would end up having a lot of the negative characteristics of both a VAT and a tariff ... I really don't like it." Additionally, Senator John Cornyn of Texas is known to be concerned about border adjustment's effect on gasoline prices. Last week he tweeted: "Many unanswered questions about proposed "border adjustment" tax."

Rep. Jim Jordan (R-Ohio), the former House Freedom Caucus chairman, told Bloomberg yesterday that he has concerns about border adjustment as well.

House Republicans have proposed taxing imports as part of a broader corporate rate-cutting reform that would tax goods based on where they are sold. Under the plan, companies would no longer be allowed to deduct the cost of imported goods and services, but would no longer pay any taxes on revenues from exports. In today's system, U.S. companies are taxed on all profits, whether they are earned in the U.S. or abroad. Republicans say the change would encourage more manufacturing within the U.S., and discourage companies from moving production overseas.

A major motivation for including the border adjustment feature in the plan is that it would raise over $1 trillion over 10 years, allowing Republicans to cut tax rates further without adding to deficits.

Perdue, however, rejected the tax as a pay-for for tax rate cuts on Thursday, calling it a "tax grab."

While it is unclear yet if the BAT will or will not be included in the final GOP tax package (according to Goldman it has virtually no chance of passing), over the past two days retailer stocks have surged on hopes this provision will be struck down shortly, even if it means that the amount of tax cuts will be less than expected.

Perdue's full letter is below (link).