Paul Ryan’s $1.2 trillion border adjustment problem is more like a $7 trillion problem.

The House speaker’s $1.2 trillion problem arises from the “border adjustment” component of his corporate tax reform plan. As part of his plan, Ryan wants to allow an exemption for income from exports and to disallow any deduction for the cost of imports. Since the United States runs a trade deficit (i.e., we import more than we export), the net effect of these two measures is to raise roughly $1.2 trillion over the next decade, according to a widely cited estimate from the Tax Policy Center.

Now, Ryan’s border adjustment proposal is running into stiff opposition from fellow conservatives, including the Koch brothers as well as several Republican senators. Republicans from states like Arkansas (the home of Walmart) and Georgia (headquarters of Home Depot) don’t like the border adjustment because retailers in their states bring in a lot of goods from abroad and so would be hit hard by the disallowance of any deduction for imports.

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