The Week in Review - March 20, 2017

SPECIAL EDITION: Border Adjustment Tax

Stop the BAT with a Dealer Visit

QUESTION: Has your Member of Congress been to your store(s) in the last two years?

If the answer is NO, sign up TODAY to Host a Dealer Visit. AIADA will do the legwork for you to make the process as simple as possible. Members of Congress will be at home in their districts for two weeks in mid-April and it’s not too late to get a Dealer Visit on the schedule. But, time is running short, so don’t delay! 

Inviting your Member of Congress to visit your dealership may sound intimidating. In reality, it’s a great, simple way to forge a meaningful relationship with those elected to represent you in Washington. It couldn’t be timelier as the House of Representatives prepares to turn its attention on tax reform and movement on the border adjustment tax. Check out AIADA’s Dealer Visit Handbook for tips and more information.

If the answer is YES, good for you! You are taking an active role in shaping policy decisions that will affect your business. But, it’s important to continue the dialogue with your Representative. If you haven’t already, reach out to the legislator that visited with you, remind them that you appreciated their visit and make sure they know that the BAT would be devastating to dealers across the country, as well as the consumers you serve. AIADA can provide you the appropriate contact information and any other information you need to do your outreach. Contact GovernmentRelations@aiada.org to get started!

Join the Fight to Stop the BAT

CLICK HERE to send a letter to your Member of Congress.

Now, share this with another dealer; get them to send a letter. Next, share it with your General Manager; get them to send a letter. And then, share it with your Sales Manager; get them to send a letter. Together we all must keep up the fight!

Here’s What YOU AUTO KNOW…All About the BAT.

If you missed this week’s webinar on the BAT, don’t worry, you can view the presentation here:

What Could the BAT Mean for Your Dealership?

Or CLICK HERE to learn more about the BAT.

Quotes of the Week

“The Border Adjustment Tax will push the cost of a new car out of reach for middle class consumers, who will already be saddled with higher costs on everyday necessities like food, clothing and medicine. Regardless of whether you buy American or foreign-made cars, costs will increase under the BAT.”               

-     George Sharpe Jr., General Manager of The Sharpe Collection (KeepAmericaAffordable.com)

"The million-plus small retail companies in the U.S. would be hit especially hard by the BAT, and many would be forced to lay off employees or even close their doors."

-      David French, Senior Vice President for Government Relations, National Retail Federation (CNBC)

“Trump should repeat his objections to a border adjustment tax that would favor the interests of some businesses over others. He can help make U.S. corporations great again by weaning them off subsidies and reducing their tax burdens.”

-      Barron’s Magazine

Border Tax Has Become a “Given,” Chief GOP Tax Writer (CNBC.com)

A border adjustment tax will probably make an appearance in the final tax reform plan, the Republicans' chief tax writer in the House of Representatives, Rep. Kevin Brady, told CNBC on Tuesday.

"My sense is that border adjustability has become a given. That it will be part of the final tax reform plan and now the discussions are how can it be designed in transition in a very positive way for importers," the chairman of the House Ways and Means Committee said on "Squawk Box."

"Because for the rest of businesses, and I would say for importers as well, looking at this strong economy, taxing everyone equally in the U.S., eliminating any tax incentives to move overseas and making sure made in America products can compete around the world ... everyone wants that in the final tax reform plan," he said.

A border adjustment tax, which would levy fees on imports, is a core part of a broad tax reform "blueprint" being pushed by House Republicans, including Speaker Paul Ryan and Brady.

To read more from CNBC.com, please click HERE.

Barron's: Kill Border Tax Before It Kills Us (Newsmax)

Taxing imports as a way to make U.S. companies more competitive with foreign factories will hurt consumers -- and isn’t the best way for the federal government to chip away at a trillion-dollar deficit, according to Barron’s magazine.

Republicans who have proposed the “border adjustment tax” should focus on cutting spending, eliminating corporate welfare and cutting other taxes as a way to boost the economy and shrink the deficit, Barron’s says.

“The BAT is a bad idea, and it should be scrapped,” the magazine says. “If all corporate welfare were cut from the budget, as much as $100 billion a year could be saved, about matching the total expected from the BAT.”

The BAT is part of a plan by Speaker of the House Paul Ryan to change the tax code in a sweeping overhaul. The levy is aimed at boosting U.S. factory production by taxing imports while exempting U.S. companies from taxation on their export revenues.

To read more from Newsmax, please click HERE.

Retail CEO Warns of 85% Tax Rate Hike Under Border Tax (CNBC.com)

As corporate America prepares for the possible implications of a border adjustment tax, Kohl's CEO warned that his company's tax rate could surge as much as 85 percent and consumers could pay much more for the things they buy. 

"The calculus on that — probably 75 percent to 85 percent is probably about right for us," the department store's chief, Kevin Mansell, said on CNBC's "Power Lunch."

Currently, the corporate tax rate stands at about 35 percent, but the border adjustment tax that House Republicans are advocating would tax imports in a move aimed at discouraging imports to the U.S. and bolstering U.S. manufacturing. Such a levy would drive the total tax paid for import-heavy companies, such as retailers, considerably higher.

"Over time, I'm sure we'll figure ways to navigate through higher tax rates," he said. "It is a bad thing for our P&L for sure. But the pricing impact for customers, to me, is what is harmful."

To read more from CNBC.com, please click HERE

This Week in Trade & Tax News         

AAP Calls on MI’s Congressional Delegation to Oppose the Border Tax (KeepAmericaAffordable.com)

If the US Wants High End Manufacturing, It Needs Imports (CNBC.com)

Border Tax Could Raise Car Prices for U.S. Consumers by $2,000 (The Globe and Mail)

Border Tax Battle Escalates With Ads Targeting 13 GOP Lawmakers (Morning Consult)

This Week in Auto News

A New Era for Nissan Design (Automotive News)

Porsche Rakes in $17,250 on Every Car It Sells (The Truth About Cars)

Do the Math: Older Used Cars in Short Supply (The Detroit News)

MUST WATCH

Watch the latest video from the American Made Coalition, proponents of the BAT.

Friday Funnies:

Interior Trunk Release Saves AL Woman

Not very funny, but feel-good news out of Alabama this week as a woman was able to escape a robbery and kidnapping attempt by using the light on her insulin pump to pop the interior trunk release latch of her moving Nissan Altima and running to safety.

Read more from the NY Post or watch the video HERE.

Lawmakers – They’re Just Like Us!

On Thursday, the day of the aborted vote on the American Health Care Act (AHCA), a group of moderate Republicans known as The Tuesday Group, met over seven boxes of pizza from Capitol Hill haunt “We, The Pizza” with sides of Doritos and Baked Lays. (CNN)

The Week in Review: Week of March 13, 2017

SPECIAL EDITION: Border Adjustment Tax

You can – and did – make a difference.

Last week more than 200 dealers, representing 38 states, more than 1,300 franchises and 70,000 employees, visited their lawmakers on Capitol Hill to voice their opposition to a border adjustment tax proposal (BAT) at AIADA’s Urgent BAT Fly-In. Ready to set the record straight and refute fake news, attendees met with nearly 230 congressional offices and even received media coverage.

If you did not attend the AIADA Fly-In you can still join in the fight to Stop the BAT.

CLICK HERE to send a letter to your Member of Congress.

Now, share this with another dealer; get them to send a letter. Next, share it with your General Manager; get them to send a letter. And then, share it with your Sales Manager; get them to send a letter. Together we all must keep up the fight!

Need more information? Sign up for next Tuesday’s AutoTalk webinar:

What Could the BAT Mean for Your Dealership?

In the meantime, you can always CLICK HERE to learn more about the BAT.

 Now, here’s what YOU AUTO KNOW…All About the BAT.

Hashtag Advocacy

Are you staying on top of your personal and company social media accounts? Members of Congress are increasingly tuned in to their constituents via social media and this can be a great way to reach them.  Don’t forget to use the hashtag #StopTheBat! You can also tweet your Member of Congress directly through AIADA's Legislative Action Center.

Quotes of the Week

“We support tax reform. We just don’t think that reform that results in higher prices is good policy.”

                -Gary Cammack, President of the South Dakota Retailers Association (Farm Forum)

"Unfortunately we've seen a number of politicians, including on the Republican side, pushing this [tax]," "We think it's just a massive $1.2 trillion tax hike on American consumers."

                -Sean Lansing, Americans for Prosperity (The Hill)

“….the [border adjustment] proposal would dramatically increase the tax burdens of companies that import finished products into the U.S. This is because companies would no longer be able to deduct their costs of goods sold from their income taxes. This would dramatically increase tax burdens, despite the decrease in tax rate, which would directly result in higher prices at the register, layoffs and potentially bankruptcy."

                -American Apparel & Footwear Association Executive Vice President Steve Lamar (Footwear News)

Momentum Mounts Against Border Tax (Auto Service World)

Critics in Canada and Mexico have already blasted United States President Donald Trump’s idea of a border adjustment tax. And now more voices within the country are speaking out.

The Motor & Equipment Manufacturers Association recently warned about the dangers of the tax. And last week, members of the American International Automobile Dealers Association spent two days in Washington, D.C. talking to House of Representative members about the dramatic impact such a tax would have in the automotive industry and to American households.

The group raised the issue that a tax reform package would essentially be putting money in one pocket of Americans by taking money out of the other — they would end up paying more for imported goods, but would receive tax cuts elsewhere.

And caught in the middle would be the auto industry, which would see almost a million jobs lost, said Cody Lusk, president of the AIADA.

“We would like to see no border adjustment tax at all,” he said. “We think there’s a better way to do tax reform that would minimize its impact on auto consumers and the auto sector. We’re paying a disproportionate amount of this tax right now as it is proposed.”

To read more from Auto Service World, please click HERE.

Border Adjustment Tax is a Gamble: Sen. Tom Cotton (USA Today)

The U.S. tax code is a mess, and Congress should eliminate all the special-interest loopholes in the code and use that money to cut taxes for everybody — including American businesses. Right now, some of my colleagues are working on a tax reform bill that would do just that. But I have grave reservations about one idea that’s being considered.

It’s called a border adjustment tax, and here’s how it would work: We’d cut the corporate tax rate, and to make up for the lost revenue, we’d tax businesses whenever they bought something from another country. So, for instance, every time Ford bought an auto part from Canada, it would pay a 20% tax. Or every time your local grocery store brought in bananas from Guatemala, it would pay a 20% tax. And whatever money businesses made from selling their products in other countries would be exempt. But what all of this would really amount to is a 20% tax on imports

To read more from USA Today, please click HERE.

Border Tax Would Hurt U.S. Energy, Steel and Autos, Trudeau Says (Bloomberg)

Canadian Prime Minister Justin Trudeau is worried that one of the closest economic relationships in the world could crumble under a Republican tax proposal.

A levy on goods imported to the U.S. would damage business on both sides of the northern border and could impede the growth of energy, automobile and steel industries that benefit from bilateral cooperation, Trudeau said at a press conference in Houston.

“A border adjustment tax would be bad not just for Canada but for the United States as well,” the prime minister told reporters Friday. “No two countries in the world have the close friendship, alliance, relationship and level of economic integration that Canada and the U.S. have.”

Millions of jobs on both sides of the U.S.-Canada border depend on smooth trade, he said. And as President Donald Trump works to make good on promises to reopen the North American Free Trade Agreement, which also includes Mexico, Trudeau is looking for a rewrite that will benefit workers and companies in each country.

“The Nafta accord has been tweaked and improved over a dozen times over the past 20 years, and one of the things that we always emphasize and we look for as a country is not a zero-sum game in terms of negotiations,” he said.

To read more from Bloomberg, please click HERE.

This Week in Trade & Tax News         

Germany Could Bring WTO Suit Over Border Tax (Reuters)

Supplier Association Seeks to Meet with Pence & Ross Over Border Tax (Automotive News)

Home Depot Co-Founder: "I can't be more excited about a border tax." (CNBC)

Boeing vs Walmart - Divided over Tax Reform Plan (Fox News)

This Week in Auto News

How Many Cars Does the Average American Own? (Cars.com)

Trump Orders Review of Fuel Economy Rules (USA Today)

Buick, Lexus Score Top Spots in J.D. Powers Service Satisfaction Scorecard (Automotive News)

MUST WATCH

Watch the latest video from Americans for Affordable Products:

Experts Agree the Border Adjustment Tax (BAT) is a Bad Idea

Friday Funny: Things You Auto Know About March Madness

  •  A No. 16 seed has never beaten a No. 1 seed.
  • Only once have all four No. 1 seeds advanced to the Final Four when Kansas, North Carolina, UCLA and Memphis met in 2008.
  • The record for most overtimes in a single game is four, and it happened twice, once in 1956 and again in 1961.
  • The odds of filling out a perfect bracket are one in 9,223,372,036,854,775,808 (that's quintillion).

 

You Auto Know...All About the BAT: Week of February 27, 2017

SPECIAL EDITION: Border Adjustment Tax

YOU can make a difference.

Join in the fight to Stop the Border Adjustment Tax. Under the tax, which has been proposed by House Republicans, all goods and services coming into the U.S. would be subject to a 20% markup. This includes not just vehicles, but also auto parts. Because no vehicle in the U.S. contains exclusively domestic content, the 20% BAT will drive up the price of every single vehicle sold in America. Don’t let congress add a 20% tax on your vehicles.

If you cannot attend the AIADA Fly-In you can still participate. Send a letter today!

CLICK HERE to send a letter to your Member of Congress.

Now, share this with another dealer; get them to send a letter. Next, share it with your General Manager; get them to send a letter. And then, share it with your Sales Manager; get them to send a letter.

Together we can make a difference.

Need more information? CLICK HERE to learn more about the BAT.

Now, here’s what YOU AUTO KNOW…All About the BAT.

Quotes of the Week

“The Berkshire Hathaway Inc. chairman told CNBC’s "Squawk Box" that the House Republican border-adjusted concept to tax imports but not exports “would be a big sales tax,” adding that it would hit “items that are not yachts or anything like that; they’re things that the ordinary person buys.””

- Warren Buffett, Chairman, Berkshire Hathaway Inc. (Bloomberg)

"My view is that this does not create jobs. It actually lowers the number of jobs for many, many companies."

- Meg Whitman, CEO, Hewlett Packard Enterprise (CNBC)

 “This type of consumer pain would spillover to stunt an already slowly-moving economy. U.S. companies have arranged their affairs based on the current tax code - trillions of dollars of decisions. Shifting to a [border adjustment tax] creates a chaotic cascade of winners and losers. This chaos is bad for the economy.

- Brain Wesbury, Chief Economist, First Trust (Fox Business)

 AIADA Joins in Sending Letter to Capitol Hill

This week AIADA joined with over 200 other businesses and trade associations in sending a letter to Capitol Hill. The coalition released a letter issued to Speaker Paul Ryan, U.S. House Minority Leader Nancy Pelosi, U.S. Senate Majority Leader Mitch McConnell and Senate Minority Leader Chuck Schumer. 

The letter stated “The Border Adjustment Tax is not simple or fair. It proposes a massive tax increase on consumers and would result in increased costs on everyday necessities like food, clothing, gasoline and prescription drugs – necessities that Americans rely on daily – by as much as $1,700. It is really a ‘cost of living tax’ that will make the lives of millions of middle-class Americans harder and more expensive.” 

To read the whole letter, please CLICK HERE. 

To see a full list of the businesses and trade associations involved with the AAP coalition, please CLICK HERE.

Finally, Here is Something YOU MUST WATCH

Follow the link and watch the short video. CLICK HERE

Special Note: You Auto Know…All About the BAT will be on the Hill for the AIADA Fly-In next week. We will return the week of March 13th.

You Auto Know...All About the BAT: Week of February 20, 2017

SPECIAL EDITION: Border Adjustment Tax

 This week AIADA reminds dealers that YOU can make a difference in the fight to Stop the Border Adjustment Tax. If you cannot attend the AIADA Fly-In you can still participate. Send a letter today!

CLICK HERE to send a letter to your Member of Congress.

Next, share this with another dealer; get them to send a letter. Next, share it with your General Manager; get them to send a letter. Next, share it with your Sales Manager; get them to send a letter. Make your voices heard.

Need more information? CLICK HERE to learn more about the BAT.

 Now, here’s what YOU AUTO KNOW…All About the BAT.

Quotes of the Week

“Some people think that they’re do­ing this so they can raise more taxes without it be­ing no­ticed,” said the top Sen­ate tax-writer, Fin­ance Chair­man Or­rin Hatch, in an in­ter­view. “But the prob­lem is that all those costs, ac­cord­ing to some crit­ics, will be passed onto Amer­ic­an cit­izens.” – Chairman Orin Hatch (UT)

Congressman Jim Jordan (R-OH) told The Associated Press: “Taxes always impact people, and it’s going to be a tax on families who are buying products.”

“Big breaks for big companies, higher prices for beleaguered consumers. Why are the Republicans doing this?” –Steve Forbes, Chairman and Editor-in-Chief of Forbes Media

Why a Border Tax is a Tax on Middle America (Morning Consult)

A proposal by House Republicans to reduce the corporate tax rate — the highest in the developed world — is an admirable attempt to make the U.S. more competitive, but combining the plan with a border adjustment tax is not the right path forward. The proposed tax would drive up costs on consumer goods — on everything from cars to smartphones — while also negating any potential benefit from a lower corporate tax rate.

Georgia Sen. David Perdue said it best when he called the plan to tax products entering the U.S. “regressive,” adding “it just hammers low-income and middle-income consumers, and it really doesn’t foster growth.” And Federal Reserve Bank of New York President and CEO William Dudley cautioned policymakers about the “unintended consequences” of such a “dramatic change” in policy.

Setting aside the potential conflicts with existing treaty obligations among our partners in the global community, the proposed border tax plan brings us one step closer to being an isolationist nation that embraces the same populist proposals that led to the Great Depression.

To read more from Morning Consult, please click HERE.

Border-adjustment tax could wipe out retail earnings by 50% or more, analyst says (CNBC)

The border-adjustment tax issue could affect retail companies' earnings per share by 50 percent or more, retail expert Oliver Chen told CNBC on Friday.

"You also have to consider how these [retail] companies acquire goods," Chen, a Cowen senior analyst, said during an interview on CNBC's "Power Lunch." "I don't think the U.S. consumer is willing to take on these price increases."

The Republican leaders' so-called border-adjustment tax would tax all imports coming into the U.S., but it would exclude exports. The hope is this plan would allow Washington to make corporate tax cuts across the board, while still generating enough tax revenue to reduce the new budget deficits that would be created.

But retail companies could take a hit, in turn. Opponents of the tax proposal say it isn't clear if it would result in a sharp jump in the dollar, which would be crucial to offset the inflationary impact of taxes on foreign goods.

To read more from CNBC, please click HERE.

And now news You Auto Know from the pro-BAT side…

CEOs Come to Defense of Border Tax Plan (The Hill)

The CEOs of several major companies are coming to the defense of the border-adjustment tax amid growing doubts about the idea in the Senate.

Border adjustability, which would subject imports to U.S. tax and exempt exports, “is consistent with the tax policies of nearly every other country in the world, and it would effectively end the ‘Made in America’ tax that creates an unfair advantage for foreign-based companies at the expense of U.S. jobs and economic growth,” the CEOs wrote in a letter to congressional leaders Tuesday.

Sixteen business leaders signed the letter, including the CEOs of Boeing, General Electric Co., McIlhenny Company, Pfizer and S&P Global. All of the businesses on the letter are members of the American Made Coalition, a group that launched earlier this month to support the border-adjustment tax.

To read more from The Hill, please click HERE.

In Trade and Tax News

The Border Adjustable Tax Can't Shrink The Trade Deficit And Produce Trillions In New Revenue (Forbes)

Border Tax Draws Battle Lines in Corporate America (Nikkei Asian Review)

Club for Growth Singles Out Noem in Border Tax Fight (Roll Call)

In Auto News

50 Years of Subaru Ads (Automotive News)

Many Rich Folks Opt for Plain ‘Ol Pickups (USA Today)

Porsche, Lexus, Toyota Top J.D. Power Dependability Study (USA Today)

Friday Funny

Hello Town Halls, My Old Friend (Independent Journal Review)

Just One Thing You Auto Know: Week of February 13, 2017

The only thing 'You Auto Know' this week:

AIADA needs YOU in Washington, D.C., on March 8-9 for our Urgent Capitol Hill Fly-In to fight back against a proposed border adjustment tax (BAT).

Why:
Congress has proposed a 20 percent tax on all goods and services entering the U.S., including autos and their parts. It is anticipated that the BAT would drive up the cost of every vehicle on dealer lots by an average of $2,300, resulting in a $28 billion impact per year on the American motor vehicle industry. This impact includes your dealership, your employees, and your customers. Click here to learn more about the BAT. 

What:
Join AIADA in Washington, D.C., on March 8-9 to let your members of Congress know why you oppose the BAT. There is no registration fee for this special event, which will include a dinner featuring political pundit Charles Krauthammer, a special legislative briefing breakfast, and visits with your legislators on Capitol Hill—which will be arranged on behalf of all registrants by AIADA.

Register:
Don't wait—click here for complete information and to register for this Urgent Capitol Hill Fly-In, or call 1-800-GO-AIADA.

You Auto Know...All About the BAT: Week of February 6, 2017

SPECIAL EDITION: Border Adjustment Tax

The Border Adjustment Tax (BAT) continues to be an issue at the top of Congress’ agenda and we need your help to #StopTheBAT. AIADA is planning a special Capitol Hill Fly-In for dealers on March 8-9 to push back against the BAT. We’re asking you to mark your calendars to attend this important event and meet with your legislators. Now is the time to weigh in on how a tax like this would devastate dealerships, dealer employees, and regular American consumers.

The BAT proposal, which is part of the House Republican “Better Way” Agenda, will hit American consumers hard, and is setting off alarm bells across our entire industry. Dealers are especially concerned because the tax would drive up the cost of every single vehicle sold in their stores, even those assembled in the United States. A recent study conducted by Deutsche Bank, pegs the average price increase at $2,300 per vehicle, reducing U.S. demand by 1.2 million units per year in the short term and 0.5 million units in the long term. So join us, and help #StopTheBAT.

CLICK HERE to register for the Fly-In – and stop this BAT.

CLICK HERE to learn more about the BAT.

CLICK HERE to send a letter to your Member of Congress.

Now, here’s what YOU AUTO KNOW…All About the BAT.

Urgent: Dealers Needed in D.C. to Fight the BAT (Paul on Point)

Welcome to Paul on Point – the blog my children, and grandchildren, are shocked I am writing.

I can’t blame them. Personally, I never envisioned myself as a blogger, but I am thankful to the past AIADA chairmen who started this online tradition. The Chairman’s Blog is a direct line to AIADA members, and I’m looking forward to using it to share the unvarnished realities I see in my role as Chairman.

While it’s still early in my term, I already have a critical call to action to make to our members – a fly-in AIADA has planned for March 8-9 to push back against the Border Adjustment Tax. We’re asking ALL AIADA dealers to mark their calendars and visit our BAT fly-in page for more information and to register to attend.

Border Adjustment Tax (BAT) legislation will soon move forward in the House of Representatives, so it is absolutely crucial that dealers be physically present on Capitol Hill. We need to meet with our representatives and educate them on the shattering impact a 20 percent tax on imported vehicles and parts could have on our businesses, customers, and employees. This tax, which is entirely separate from anything in President Trump’s agenda, was born in the House Ways and Means committee and was once described by the President as, “too complicated.”

To read more from Paul on Point, please click HERE.

GOP Plan to Overhaul Tax Code Gets Held Up at the Border (The Wall Street Journal)

Republicans see a once-in-a-generation opportunity to overhaul the U.S. tax code. Just weeks into Donald Trump’s presidency, they are getting a taste of why such attempts are always confounding—every action creates an equal and opposite reaction.

A linchpin of the House Republicans’ tax plan, an approach called “border adjustment,” has split Republicans and fractured the business world into competing coalitions before a bill has even been drafted.

A border-adjusted tax would impose a levy on imports, including components used in manufacturing, and exempt exports altogether. Opposing it are retailers, car dealers, toy manufacturers, Koch Industries Some retailers and other big importers doubt the dollar would rise that much. They warn of tax bills that would exceed profits, forcing them to pass costs to consumers. Some are in the early stages of working on an alternative plan they can present to lawmakers, says a person familiar with those plans.

Cody Lusk, president of the American International Automobile Dealers Association, says his members are shocked that a Republican Congress is proposing a 20% tax on imports.

“We view this as a very, very serious potential blow to the auto sector and the economy,” says Mr. Lusk, whose members sell Toyotas, Hondas and other cars from foreign-headquartered companies.

He likes aspects of the House plan, “but when we look at the whole, I don’t think the juice is worth the squeeze.”

To read more from The Wall Street Journal, please click HERE.

Former Sen. Gramm Urges Senate to Fight GOP Border Tax (CQ Roll Call)

Former Sen. Phil Gramm leveled a broadside attack Wednesday on the House GOP border adjustments plan, as leaders of both chambers deployed economic experts on opposite sides of the revenue-raising proposal.

The Texas Republican, now a consultant and private equity fund vice chairman, confirmed in an interview that he had taken a strong stand against the House GOP proposal while a guest at the Senate Republican policy lunch.

Under border adjustments, imports would be taxed while exports would be excluded when businesses file their tax returns. It would raise $1.2 trillion over 10 years, according to the Tax Policy Center.

“I think that it’s a dangerous policy. And I think no one has thought through and understands the adjustment mechanism — It would disrupt 28 percent of the economy,” said Gramm, a former economics professor who still advises Majority Leader Mitch McConnell on policy issues.

He cited the combined share of gross domestic product that is linked to both imports, about 13 percent of GDP, and exports, about 15 percent of GDP.

“It’s all with the idea that somehow we’re going to collect some revenues. It’s too risky for me,” Gramm said.

To read more from CQ Roll Call, please click HERE.

In Trade and Tax News

Reform, Including a Border Adjustment Tax, Will Happen This Year, Chief GOP Tax Writer Says (CNBC)

A Taxing Proposal: Our View (USA Today)

Your Car Could Cost Up to $17,000 More With the Proposed Border Tax (Bloomberg)

In Auto News

Mitsubishi Debuts Outlander Sport Limited Edition (The Detroit News)

The Most Annoying New Car Features (Forbes)

Study: Consumers Ready to Buy EVs if Product Right (WardsAuto)

Friday Funny

Nothing funny this Friday, but must see videos for you to watch. Two great videos on the BAT: first, Sen. David Perdue stating his concerns with the BAT; and second, a CNBC discussion on BAT.

Sen. David Perdue Interview

CNBC Discussion

You Auto Know...All About the BAT: Week of January 30, 2017

SPECIAL EDITION: Border Adjustment Tax

 You Auto Know has transformed into You Auto Know…All About the BAT.

Congress has proposed a new 20 percent tax on all goods or services imported into the U.S.; it’s called the Border Adjustment Tax (BAT). It would apply to all autos and auto parts coming across our border into the United States, even from countries with which we have existing trade agreements. No car made in America has 100 percent domestic content. Therefore, this 20 percent import tax will increase the price on ALL new vehicles. This proposal is part of the House Republican Ways and Means “A Better Way” agenda; it is not a plan that President Trump has offered.

AIADA supports pro-growth, comprehensive tax reform, but believes the BAT provision currently being deliberated by the House of Representatives will have unintended consequences that will cause harm to auto dealers and their business, their employees, and their customers. A recent Deutsche Bank study found: “…that border adjustments could increase the cost of an average vehicle by $2,300, reducing U.S. demand by 1.2 million units per year in the short term and 0.5 million in the longer term. Consumers will also have to absorb the effects of higher regulatory cost ($2000 over 5-years) and interest rates.” AIADA opposes the BAT and is working to make sure it is not included in the final tax reform package.

AIADA is your resource center on this issue. So, stay tuned and stay alert. Learn all you need to know about the BAT and what you can do to help #StopTheBAT.

CLICK HERE to learn more about the BAT.

CLICK HERE to send a letter to your Member of Congress.

Now, here’s what YOU AUTO KNOW…All About the BAT.

Border Adjustment: The War Officially Begins (Axios)

Background: House Speaker Paul Ryan thinks the only way he can pay for massive tax cuts is through a $1.2 trillion revenue plan known as "border adjustment" that raises taxes on imports and lowers them on exports.

Fighting for border adjustment: The “American Made Coalition”, a coalition of more than 25 American businesses. GE is playing a leading role and hosted coalition partners at its D.C. offices recently. Boeing is another big player on this side of the fight. Other industries include manufacturing, high tech, software, medical device production, agriculture, energy production, biopharmaceuticals and information services.

Oh, and Paul Ryan, House GOP leadership, Trump's chief strategist Steve Bannon and (maybe) a lukewarm President Trump.

Fighting against border adjustment: "Americans for Affordable Products." As the AP reports: "More than 100 retailers including Wal-Mart and Target as well as key trade associations are launching a new coalition" aimed at fighting border adjustment. The coalition includes The National Retail Federation, along with the American International Automobile Dealers Association, the National Grocers Association. Walmart is a major hitter in this group and the well-funded Koch network will be supporting the opposition to border adjustment.

Why this matters: It's the biggest fight of the tax season. But, as we have reported, Ryan has his work cut out for him. Especially in the Senate.

To read more from Axios, please click HERE.

Retailers, Auto Groups, Others Announce Coalition Opposing Border Adjustable Tax (World Trade Online)

More than 100 companies and industry organizations have formed a coalition, “Americans for Affordable Products,” to oppose the border adjustable tax portion of the House Republican tax reform blueprint, a provision some analysts say could lead to a World Trade Organization dispute resulting in massive retaliation against the U.S.

The coalition will engage in a “national campaign” to convince lawmakers and the public that a border adjustable tax as envisioned in the House GOP blueprint will increase the costs of basic items for consumers, including food, gas and clothing, the group said in a Feb. 1 press release.

Among the coalition's members are retail industry groups like the National Retail Federation, the American Apparel & Footwear Association, Footwear Distributors & Retailers of America and numerous state-level retail coalitions. Large companies such as Gap, Target, Walmart, QVC, Rite Aid, Nike, Petco, Macy's, Best Buy, Ikea and Pernod Ricard have also signed on.

Auto companies and organizations, including the Association of Global Automakers, AutoZone and the American International Automobile Dealers Association, are involved as well.

The border adjustable tax would function as a consumption-based tax that essentially exempts revenue from exports from taxation but generally prevents deductions for imports. It would also have the effect of shifting the tax base to consumption in the U.S., a major overhaul of the federal tax system.

To read more from World Trade Online, please click HERE.

Auto Industry: Possible Border Tax Would Raise Prices, Even On American-Made Cars (Consumer Reports)

Facing a possible new tax on imported goods, some of the biggest name in auto manufacturing and retail are calling on lawmakers to rethink the tax, claiming it will hurt their businesses and lead to higher prices.

While no actual legislation has been introduced, the proposal that has been kicking around Capitol Hill for the last month or so involves cutting the current corporate income tax rate of 35% to 20%. To make up for that rate drop, companies would no longer be able to deduct the cost of imported goods from their profits.

So, for example, imagine a U.S. company that imports $1 million worth of product, and sells them for $2 million stateside after spending about $500,000 domestically, resulting in a profit of $500,000.

Under the current tax code, the company deducts the import and domestic expenses, and pays 35% tax, but only on the $500,000 profit. If this proposal is put in place, that company would not be able to deduct the $1 million of import costs, so it would pay the lower 20% tax, but on $1.5 million instead of $500,000.

Given the volume and cost of imported cars into the U.S., it’s little wonder that the automotive industry is making a big push for Congress to rethink this tactic.

The American International Automobile Dealers Association — a trade group that lobbies lawmakers on behalf of some 9,500 U.S. car dealers — has called on its members to pen letters to legislators, arguing that automaking is an inherently international industry, so taxing imports is going to drive up the cost of vehicles regardless of where they are assembled.

“Auto parts would be subject to a BAT, so even the most American-made vehicle sold in the U.S. today – the Toyota Camry – would be subject to a significant price increase,” writes AIADA. “Rising prices will drive away regular Americans looking for a new car and, as a result, vehicle demand will drop. Both American auto manufacturing plants and retailers like you will feel the pain, and be forced to shed jobs.”

To read more from Consumer Reports, please click HERE.

In Trade and Tax News

U.S. Tax Plan Would Break WTO Rules, Lawyers Say, As EU Business Frets (Reuters)

Here's a Glimpse of the Global Trade Carnage From a U.S. Border Tax (Bloomberg)

Hatch Has Questions About House GOP Border Tax (The Hill)

In Auto News

Auto Industry Begins 2017 with a Steady Pace (AIADA’s Market Watch)

Volkswagen to Pay $1.2 Billion to U.S. Vehicle Owners Affected by Emissions Scandal (The Wall Street Journal)

Dealers Inch Closer to Full Online Sales (Automotive News)

Friday Funny

Many of you watch the Super Bowl for the football, but there are many who watch for the commercials. For you commercial lovers here’s a little preview.

Budweiser, Skittles, Mr. Clean, More: Watch Every 2017 Super Bowl Commercial Already Released (USA Today)

The Week in Review: The Week of January 16 - 25, 2017

Capitol Hill and Pennsylvania Avenue

The past ten days have been a busy time in D.C. The main attraction was the inauguration ceremony of Donald J. Trump to become the 45th President of the United States. Republican, Democrat, or Independent, we can all agree the peaceful transfer of power in the United States is something we are all thankful for and support.

President Trump hit the ground running with executive orders to freeze regulations and freeze federal employee hiring. He continued to move forward this week with additional orders to renegotiate the North American Free Trade Agreement (NAFTA) and remove the U.S. from the Trans-Pacific Partnership (TPP). In his executive order on the TPP, the President encouraged talks on smaller bilateral agreements to begin as soon as possible.

Congress continued to move forward with its agenda over the week. The main focus was in the Senate where President Trump’s cabinet nominees progressed further in the process toward final confirmation. Two of the president’s nominees were confirmed immediately following his swearing in: Gen. John Kelly (Department of Homeland Security), and Gen. James Mattis (Department of Defense). Subsequently, Rep. Mike Pompeo (Central Intelligence Agency), and Gov. Nikki Haley (Ambassador to the United Nations) were confirmed. The remaining nominees are still going through the hearing process and will be voted on over the next few weeks.

Border Adjustment Tax

The Border Adjustment Tax (BAT) continues to be at the top of our agenda on Capitol Hill. House Republicans are moving forward with their plan to put a BAT in place in their tax reform plan. AIADA believes “You Auto Know” that this issue is being discussed, is part of a Capitol Hill proposal, and will directly affect you and your business. AIADA will continue to keep you up to date on the BAT. To find out more about the BAT, read AIADA President, Cody Lusk’s letter to the AIADA membership. Also, watch Cody’s CBT News interview.

Annual Meeting and Luncheon

Finally, if you’re heading to New Orleans for NADA’s annual convention in just a few weeks, make plans to join your fellow AIADA dealers on January 29 for our 47th Annual Meeting. Featuring keynote remarks from John Mendel, Executive Vice President at American Honda Motor Co., Inc., it's an event you can't afford to miss. We’ll also be talking about the BAT and giving you more information on the upcoming agenda in Washington, D.C.  

Don’t wait. Register today by clicking HERE.

 

Now, here’s what YOU AUTO KNOW.

Five Takeaways From Trump's Inauguration (The Hill)

Donald Trump was sworn in as the 45th president of the United States on Friday in Washington. 

The day’s events contained all the pomp and circumstance meant to signify the peaceful transition of power. But Trump’s combative first speech as president also showcased his intent to shake things up in the nation’s capital. 

Here are five takeaways from the inauguration.

Trump as schmoozer-in-chief 

President Trump’s predecessor, Barack Obama, was famously averse to glad-handing with members of Congress. 

Obama long faced criticism that his aloof style hurt his ability to persuade lawmakers to advance his agenda, an accusation he long disputed. 

If Friday was any indication, Trump won’t be accused of the same thing. 

He turned on the charm when he appeared with lawmakers at the Capitol to sign his first orders as president. 

He joked with congressional leaders in both parties and offered them pens after signing the papers, which included formal nominations. 

To read more from The Hill, please click HERE.

Executive Orders: What Trump Can And Can't Do (CNN)

President Donald Trump dives into the business of policy Monday, signing executive actions that remove the US from the Trans Pacific Partnership, enacting a federal employee hiring freeze (except for the military), and reinstating the "Mexico City policy" on abortion funding.

In doing so, he's utilizing his "executive power" — a wide, but vague, set of prerogatives granted to the US president in Article II of the Constitution.

Every president dating back to George Washington has used executive powers in some fashion or another — some more than others.

Trump's predecessor Barack Obama was an avid user of his executive powers. He followed a long tradition of presidents using unilateral moves to bypass resistant lawmakers.

Here are some things to know about President Trump's unilateral moves -- what they can accomplish and what they can't.

To read more from CNN, please click HERE.

Let's Bury The Idea Of A Border Adjustment Tax (Investor’s Business Daily)

There are serious problems with the U.S. corporate tax code: The corporate tax rate of 35% is the highest in the industrialized world, and U.S.-based companies are taxed at that rate when they bring overseas profits back into the country. For those reasons and more, there is widespread agreement that our corporate tax code is broken and in need of reform.

House Republicans now have a prime opportunity to undertake corporate tax reform, and they've proposed some pro-growth ideas, including rate reductions, incentives for investment, and reform in how purchases are expensed.

Unfortunately, all of that good reform could be wiped out by a separate complicated proposal from the House GOP that amounts to a costly new consumer tax called the Border Adjustment Tax (BAT).

Under the BAT, or border adjustability tax, imports are taxed and exports are exempted. Here's how that looks: A local retailer pays $40 to import a gadget that it then sells for $50. Under current tax law, that retailer can deduct its cost and only owe tax on the $10 profit. But, with a BAT in place, that retailer would owe corporate taxes on the full $50 sale price.

To read more from Investor’s Business Daily, please click HERE.

Border Tax Criticism Clouds Reform Push (The Hill)

President-elect Donald Trump's criticism of a Republican tax reform plan could complicate the effort to overhaul the tax code this year. 

In an interview with The Wall Street Journal, Trump expressed opposition to a part of the House GOP blueprint known as “border adjustment” that would tax imports and exempt exports from the corporate tax.

Congressional supporters of the idea see it as a way to prevent companies from moving jobs to other countries. But Trump called the proposal “too complicated” and suggested that it would not be needed in addition to tax cuts.

“Under the border adjustment concept, if somebody is making a motorcycle or a plane in our country, they’re getting a credit for the plane they make before they send it over to wherever it’s going,” Trump told the Journal. “And you don’t need that plus lower taxes and everything else.”

It’s unclear how strongly Trump is against the provision.

Trump has shown a willingness to be flexible on taxes; over the course of his president campaign, his tax plan moved closer to that of House Republicans. And Trump’s incoming White House chief of staff, Reince Priebus, has expressed interest in the border adjustment proposal in the past.

To read more from The Hill, please click HERE.

In Trade and Tax News

Taxing Imports Should Not Be Part of Tax Reform (Real Clear Policy)

How to Figure Out the Impact of Border Adjustments on Your Financials (borderadjustmenttax.com)

Wilbur Ross Vows to Push Trump’s Trade Agenda, Starting With NAFTA (The New York Times)

US Treasury Nominee Mnuchin: Will Enforce Trade Policies That Keep Dollar Strong (Reuters)

In Auto News

New AIADA Chairman Reaffirms Focus on Free Trade (Automotive News)

Wal-Mart Muscles Into Auto Sales (Automotive News)

Americans Have Fallen in Love With Little Big Cars (The Washington Post)

Friday Funny

“I hope you are as fun on the dais as you were on your couch.” – Energy Secretary Designee Rick Perry’s response when asked by Sen. Al Franken, D-Minn., if Perry enjoyed meeting him during an earlier private chat in Franken’s office. Click below to watch the video. (Fox News and video on Market Watch)

*Special Note: You Auto Know will be attending the AIADA Annual Meeting this week and will return the week of January 30, 2017.

The Week in Review: The Week of January 9, 2017

Border Adjustment Tax

Republican Leadership in Congress is continuing to meet this week with members of President-elect Trump’s team. They are working together to come up with a plan to replace the Affordable Care Act (ACA) and talking about what will come next on the legislative agenda. At the top of the list is a major tax reform bill; included in the House Republican proposal is a border adjustment tax (BAT). AIADA believes You Auto Know that this issue is being discussed, is part of a proposal, and will directly affect you and your business. AIADA will continue to keep you up to date on the BAT. Click here to read AIADA Chairman Greg Kaminsky’s blog post on the issue.

Congressional Floor Action

Also in D.C., the first full week of the 115th Congress is coming to an end and it’s been a busy one. The Senate hit the ground running and voted for a budget that puts in place a repeal of the ACA. The Senate Committees were also hard at work with the first of numerous hearings for President-elect Donald Trump’s cabinet nominees. Not to be left out, the House is also taking action and voting today on a path to repeal the ACA.

AIADA Annual Meeting and Luncheon

Finally, if you’re heading to New Orleans for NADA’s annual convention in just a few weeks, make plans to join your fellow AIADA dealers on January 29 for our 47th Annual Meeting. Featuring keynote remarks from John Mendel, Executive Vice President at American Honda Motor Co., Inc., it's an event you can't afford to miss. We’ll also be talking about the BAT and giving you more information on the upcoming agenda in Washington, D.C.  

Don’t wait. Register today by clicking HERE.

Now, here’s what YOU AUTO KNOW

OMG! House Republicans Are Preparing To Hit Consumers With A Horrible New Tax That Will Harm Trump And Hurt The Economy (Forbes)

Republicans in the House of Representatives are inadvertently setting a nasty political and economic trap for Donald Trump. Yes, it’s the Republicans, not the Democrats, who are ready to administer an unnecessary black eye to the new President. That’s not their intention, but it manifestly will be the result.

The vehicle for this unwitting GOP punch is a new exaction called the border adjustability tax. This levy will cost American consumers at least a trillion dollars over the next ten years. Knowing how Washington politicians calculate these things, you can bet the amount will end up being considerably more. Prices for everyday items, such as socks, shoes and household appliances, will go up. So will tech devices like the iPad, not to mention automobiles and trucks. Gasoline? Millions of Americans will pay an additional 30 cents or more per gallon at the pump. Lower-income and struggling middle-class Americans will get hit the hardest.

Few people are even aware of what the Republicans are getting ready to hit them with. There has been virtually no debate or public discussion about this new, horrible tax, yet in one of those strange fits of collective, self-destructive behavior, numerous GOP lawmakers are ready to enact it.

Here’s how, in essence, this sneaky, anti-consumer tax works. Importers will no longer be allowed to deduct an item as a business expense. To simplify things, let's say a store imports a pair of sneakers for $40 and then sells them for $50, making a $10 profit on which it would owe taxes. Under the Republican plan, however, the retailer wouldn't be able to deduct the $40 it paid for the sneakers. In fact, it would owe taxes on the entire $50! And who, ultimately, pays this tax? You, the consumer, in the form of higher prices or fewer choices of where you can shop. Retailers and their customers will be hit.

To read more from Forbes, please click HERE.

Paul Ryan And Trump Team Meet To Hash Out Tax And Obamacare Overhaul Plans (The Wall Street Journal)

House Speaker Paul Ryan (R., Wis.) and members of the Trump transition team met for more than two hours Monday night to try to sort out differences on their ambitious plans for overhauling the tax code and repealing the Affordable Care Act.

Around 7 p.m., Trump transition team member Reince Priebus, President-elect Donald Trump’s choice for chief of staff, entered Mr. Ryan’s chambers with Treasury Secretary-designate Steven Mnuchin, economic adviser Gary Cohn, chief strategist Steve Bannon, and Jared Kushner, the son-in-law Mr. Trump has designated as a senior White House adviser. Over a dinner of Italian food, the group hashed out policy ideas.

From the start, the agendas didn’t match. A senior GOP aide said the purpose of the meeting was to walk through the tax overhaul plan that House Republicans outlined last year. The Trump team had said the meeting was to focus on the budget, taxes, the Affordable Care Act and infrastructure, a broader portfolio of topics than envisioned by the Republican leader.

House Republicans are pushing a novel tax plan that relies on imposing the U.S. corporate tax on imports while exempting exports. That so-called border adjustment and other features of the plan would increase incentives for manufacturing to take place in the U.S. and limit the benefits companies can get from shifting their addresses and jobs abroad. But retailers, refiners and importers warn the approach would raise prices for consumers, if currency values don’t adjust as economists predict.

To read more from The Wall Street Journal, please click HERE.

Trump Planning To Give Cabinet Unusually Wide Latitude (Politico)

President-elect Donald Trump plans to give his Cabinet secretaries and top aides significant latitude to run their federal agencies, marking a sharp departure from Barack Obama’s tightly controlled management style, according to people involved in and close to the transition.

Members of Congress, transition team officials, real estate lawyers, lobbyists and executives in New York who know Trump expect him to be a chairman-of-the-board style manager in the White House.

Trump, they say, doesn’t usually like getting into day-to-day minutiae or taking lengthy briefings on issues. He doesn’t have particularly strong feelings on the intricacies of some government issues and agencies, these people say, and would rather focus on high-profile issues, publicity and his brand.

And he’s expected to grant his Cabinet lots of autonomy — at least until he sees something as a problem or an issue involves significant publicity or money.

The approach comes with upsides and downsides. On the one hand, Trump’s senior officials will likely be given plenty of latitude to act quickly and decisively without being constantly micromanaged by the big boss. But on the other hand, they will always run the risk of being blindsided when the incoming president decides on a whim to weigh in on some topic in their portfolio.

To read more from Politico, please click HERE.

In Trade and Tax News

If The GOP's Border Tax Adjustment Won't Close The Trade Deficit Then Why Do It? (Forbes)

These Trade Policies Will Hurt US Companies And Consumers (The Hill)

Border Adjustment Tax Is The Sleeper Issue In The House Republican Tax Reform Blueprint - Waking Up From A Long Winter’s Nap (The National Law Review)

In Auto News

Donald Trump's Tweets Shake Auto Industry (Detroit Free Press)

The Most Important Vehicles At The 2017 Detroit Auto Show (AutoNews)

VW Pleads Guilty To Conspiracy, Obstruction Of Justice; 6 Execs Charged (USA Today)

Friday Funny

Nothing funny this Friday, but a good video on the discussion of the Border Adjustment Tax by Adam Posen, the President of the Peterson Institute for International Economics on Bloomberg

The Week in Review: Week of January 2, 2017

On Tuesday, January 3, 2017, Members of the House and the Senate were sworn into office and officially became the 115th Congress of the United States. The Congress wasted no time getting straight to work. The House has already passed legislation to help roll back overreaching, last minute federal regulations. The Senate held a hearing on the Russian hacking situation and began scheduling nomination hearings for President-elect Trump’s cabinet nominees, which will start next week. Washington is back to work; however, the other side of Pennsylvania Avenue is still waiting for its start.

President-elect Trump and his transition team have been hard at work since immediately after the election. There are close to 4,000 political appointment jobs in each presidential administration. Finding qualified people to fill these jobs is an enormous task, but an important one. At noon on January 20th, the keys will be turned over to President-elect Trump and his administration; at that point their policy issues and agenda will come to the forefront.

AIADA is actively working on the issues important to the international nameplate autodealers. Those in the Congressional Republican leadership are making plans with President-elect Trump and his team to set the agenda. Specifically, we want to remind you of an issue we began talking about right before the December break, a major tax reform bill that may be moving quickly. Of particular interest to international nameplate auto dealers is the potential for a border adjustment tax (BAT). Such a tax is actually included in the House Republican proposal currently under discussion. It could add a 20 percent fee to any good or service imported into the United States, including autos and auto parts. AIADA is working hard to make sure the dealer’s voice is heard during this process. Continue to stay tuned for L.A.N. Action Alerts and Notifications.

Speaker Paul D. Ryan swearing in members of the 115th Congress on Tuesday.

Credit: Stephen Crowley (The New York Times)

 Now, here’s what YOU AUTO KNOW.

GOP Congress Storms Into Trump Era

Congressional Republicans are returning to Washington on Tuesday with high hopes for a new era under President-elect Donald Trump.

GOP lawmakers are eager to start work on an ambitious legislative agenda after gaining control of both Congress and the White House for the first time in a decade.

Though many congressional Republicans tepidly embraced Trump during the campaign, they’re increasingly optimistic that they’ll be able to work with him to pass big-ticket items like tax reform that have been non-starters during the Obama years.

Rep. Tom Cole (R-Okla.), a member of House leadership, said his Republican colleagues were “almost giddy” about the new session that’s beginning. 

"[Trump’s] really reached out to Congress in the transition,” he said. “We've got so much more favorable relationship with the new administration. ... We know if we can get things to the president's desk that they'll be signed.” 

Rep. Markwayne Mullin (R-Okla.) echoed those remarks, telling a local radio station that Republican lawmakers are “beside ourselves” with excitement.

The era of good feeling is spilling over into the upper chamber, where GOP senators will be responsible for clearing Trump’s Cabinet nominees as well as approving his pick to fill the late Justice Antonin Scalia’s Supreme Court seat.   

To read more from The Hill, please click HERE.

Ryan Standing Behind Border Adjustments Amid Industry Criticism

House Speaker Paul Ryan is standing behind a Republican plan to impose a “border adjustable” taxation system, despite a flurry of private sector criticism.

“The speaker is a strong supporter of border adjustability and believes it is a critical component of tax reform,” AshLee Strong, a spokeswoman for Ryan, said in a Wednesday email to Morning Consult.

The border adjustable system was unveiled last year as part of a House GOP tax overhaul “blueprint” that’s backed by Ryan. Under the proposed regime, imports would be subject to a tax and exports would be exempt. The aim is to generate revenue to pay for tax cuts while encouraging companies to manufacture inside the United States and export their goods abroad, rather than the other way around.

Strong’s reiteration of Ryan’s position came after the Wisconsin Republican on Wednesday rebuked President-elect Donald Trump’s push for punitive tariffs on U.S. companies that don’t invest domestically. In an interview with radio host Hugh Hewitt, Ryan said Congress is “not going to be raising tariffs.” He said tax reform, instead, would create the opportunity to help American businesses stay competitive.

To read more from Morning Consult, please click HERE.

Concerns About the “Border Adjustable” Tax Plan from the House GOP, Part I

The Republicans in the House of Representatives, led by Ways & Means Chairman Kevin Brady and Speaker Paul Ryan, have proposed a “Better Way” tax plan that has many very desirable features.

*Death tax repeal                                                            *Depreciation replaced with expensing

*Corporate tax rate dropped to 20 percent                         *No deduction for state and local taxes

And there are many other provisions that would reduce penalties on work, saving, investment, and entrepreneurship. No, it’s not quite a flat tax, which is the gold standard of tax reform, but it is a very pro-growth initiative worthy of praise.

That being said, there is a feature of the plan that merits closer inspection. The plan would radically change the structure of business taxation by imposing a 20 percent tax on all imports and providing a special exemption for all export-related income. This approach, known as “border adjustability,” is part of the plan to create a “destination-based cash flow tax” (DBCFT).

To read more from Forbes, please click HERE.

House Passes Bill to Overturn 'Midnight' Regulations en Masse

Legislation to allow Congress to repeal in a single vote any rule finalized in the last 60 legislative days of the Obama administration sailed through the House Wednesday, the second time in less than two months.

The GOP-backed Midnight Rule Relief Act, which passed the previous Congress in November, was approved largely along party lines by a vote of 238-184 on the second day of the new Congress, despite Democratic opposition.

If passed by the Senate and signed by President-elect Donald Trump, the legislation would amend the Congressional Review Act to allow lawmakers to bundle together multiple rules and overturn them en masse with a joint resolution of disapproval.

The White House has already threatened to veto the bill if it were to make it to President Obama's desk before he leaves office.

To read more from The Hill, please click HERE.

In Trade and Tax News

Trump's Tariffs Or Tax Reform: Which Will Congress Pick? (CNN Money)

Tax Policy: ‘Border Adjustability’ Is a Looming Risk for Markets (Barrons)

It's a new era for the United States Trade Representative (The Hill)

In Auto News

Toyota Reminds Trump It Has Invested More Than $21 Billion in U.S. Economy (NBC News)

Auto Industry Enjoyed Record Sales in 2016 (AIADA News)

10 Cars People Keep for 10 Years (CBS News)

Friday Funny

Members of the House and the Senate take the oath of office as a group in their respective chambers. Afterwards House Members and Senators go for reenactment photos and video; the Senate with Vice President Joe Biden, and the House with Speaker Paul Ryan. Check out the reenactments below.

Biden Being Biden One Last Time (Roll Call)

Paul Ryan on Twitter (@SpeakerRyan)