The Week in Review: July 24, 2017

SPECIAL EDITION: Border Adjustment Tax

BAT DEAD:  Set Aside to Advance Tax Reform

In a joint statement released by the office of Speaker Paul Ryan (R-WI) late yesterday on behalf of the “Big Six,” the group of House, Senate and Administration officials attempting to form a joint Republican position on tax reform, finally declared the BAT officially off the table.  AIADA released a statement lauding the decision and reaffirming support for advancing real pro-growth tax reform.

All those who took action – by attending the Urgent BAT Fly-in in March, by sending an email or making a call to their Members of Congress, or by hosting a Dealer Visit to showcase the importance of dealers to their local economy – had a hand in this tremendous victory. 

Thank you for your help in killing the BAT!

Don’t forget that August is “Take Your Congressman to Work Month”

Sign up to host a Dealer Visit today!

Quotes of the Week

“The overarching goal of tax reform is more important than any single policy. We agreed to move forward without BAT once we determined there is a viable alternative that still creates a level playing field for American businesses.”

            -Speaker Paul Ryan (R-WI) (www.speaker.gov)

“While we have debated the pro-growth benefits of border adjustability, we appreciate that there are many unknowns associated with it and have decided to set this policy aside in order to advance tax reform.”

            -Speaker Paul Ryan (R-WI), Chairman Kevin Brady (R-TX), Majority Leader Mitch McConnell (R-KY), Chairman Orrin Hatch (R-UT), Treasury Secretary Steve Mnuchin and National Economic Council Director Gary Cohn (www.speaker.gov)

Ryan Drops Border-Tax Proposal as GOP Unifies Around Principles (The Hill)

The White House and congressional GOP leaders said Thursday that they are no longer looking at a border-adjustment tax as they work to get tax reform legislation enacted this year.

In a statement backed by Speaker Paul Ryan (R-Wis.), the leading advocate for the border tax, the GOP's "Big Six" said they were casting the idea aside. 

“While we have debated the pro-growth benefits of border adjustability, we appreciate that there are many unknowns associated with it and have decided to set this policy aside in order to advance tax reform,” the administration officials and lawmakers said in a statement.

The border-adjustment proposal, part of a tax reform plan House Republicans released last year, would subject imports to U.S. tax while exempting exports. Supporters of the proposal had argued that it would remove incentives for companies to move their jobs and headquarters to other countries.

But the proposal faced steep pushback from the retail industry, conservative groups and many GOP lawmakers. The White House and GOP Senate leaders never embraced the proposal.

The administration officials and congressional leaders said that they believe they can find a way to encourage domestic manufacturing without a border-adjustment tax.

“We are now confident that, without transitioning to a new domestic consumption-based tax system, there is a viable approach for ensuring a level playing field between American and foreign companies and workers, while protecting American jobs and the U.S. tax base,” they said.

This Week in BAT News

Top Republicans Behind Tax Plan Say Border Adjustment Tax is Dead (CNBC)

White House, GOP Leaders Drop 'Border Tax' Idea (Roll Call)

Report Warns of Costs and Jobs Threat from Border Adjustment Tax (Automotive Logistics)

This Week in Other Policy News.

House Committee Approves Self-Driving Legislation, Refines Safety Exemptions (Automotive News)

House GOP Votes to Kill Rule That Makes It Easier to Sue Banks (Bloomberg)

Autos Loom Large in U.S.-Korea Trade Talks (Automotive News)

Rhetoric yields to reality ahead of NAFTA talks (Automotive News)

This Week in Auto News

10 SUVs Arriving in 2018 (MSN)

Detroit Automakers Downshift Workforce, Lineups (The Detroit News)

House Advances Bill to Clear Road for Self-Driving Cars (The Detroit News)

Must Watch

Watch BAT Architect Chairman Kevin Brady (R-TX) finally hedge on his commitment to the BAT on Fox Business.

Friday Funny

Nothing too funny this week, but a friendly reminder that the “dog days” of summer are upon us and stories of kids and/or pets tragically left in hot cars abound.  Please do your part to spread the word that it is never okay to leave anyone or anything in a vehicle, even on “mild” summer days!

You Auto Know will be on hiatus for the month of August, except in the event of any urgent developments, as Congress heads home for the district work period.  We’ll see you in September!

The Week in Review: July 17, 2017

SPECIAL EDITION: Border Adjustment Tax

Pro-BAT Lobby Shifts Stance; Indicates Openness to “Other Solutions”

As the Senate continues to look for ways to pass a healthcare overhaul, the debate on tax reform continues to simmer in the background.  Earlier this week, we saw an interesting shift in rhetoric by the pro-BAT “American Made Coalition” with the release of their letter to Senate Finance Committee Chairman Orrin Hatch (R-UT) asserting that while they continue to support the House Blueprint (BAT included), they are “open to other solutions” that would achieve their tax reform priorities.

While this might not seem like much, it is actually a significant concession, indicating that the group sees the chances of having the BAT written into law as unlikely.  While this is great news, the chief congressional proponents of the BAT, Speaker Paul Ryan (R-WI) and Chairman Kevin Brady (R-TX), continue to insist it will be included in the House plan. 

Dealers must continue to contact Congress and tell them to drop the BAT, once and for all!

Click Here to send an email to your Member of Congress.

Sign Up to invite your Member of Congress for a Dealer Visit.

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

Quotes of the Week

“Everybody says border adjustment tax is dead. I think it is, and it seems to be the prevailing view point. But you still have the Speaker of the House and the head of the committee of jurisdiction behind this. So, it’s never over until it’s over.”

                -Rep. Mark Sanford (R-SC) (Politico)

“It's dead. The question is, are we going to realize it’s dead now, or are we going to fail at the first effort at tax reform two months from now when it's still in there and the votes start to hemorrhage?”

                -Rep. Ron DeSantis (R-FL) (Washington Examiner)

[The border adjustment tax is] “plain stupid, wrong, misguided.”

                -Rep. Darrell Issa (R-CA) (Los Angeles Times)

GOP Chairman Gets Hundreds of Thousands of Comments on Tax Reform (The Hill)

Senate Finance Committee Chairman Orrin Hatch (R-Utah) received hundreds of thousands of comments on tax reform from taxpayers and groups after his call for feedback from stakeholders, a committee spokesperson said Monday.

Hatch and other Republicans are hoping to pass tax-reform legislation this year. The Utah Republican is one of six lawmakers and administration officials who meet regularly to work on a tax framework that the White House, House and Senate can all support. He has also tasked GOP members of the Finance Committee to provide input on specific areas of the tax code.

Hatch said he was particularly interested in recommendations about how to provide tax relief to the middle class, make tax changes that strengthen small and large businesses, remove barriers to savings and investment, and modernize the international tax system. The Finance Committee is planning to keep stakeholders’ submissions confidential, but some groups have publicly released their comments.

“Our coalition members would be disappointed if Washington squanders this once-in-a-generation opportunity by abandoning real reform to instead enact a temporary rate cut or some other half-measure that fails to fix what is really broken in our tax code,” said the American Made Coalition, a group of businesses that includes Boeing, General Electric and Pfizer. “That is why we are calling on Congress to deliver permanent, transformative tax reform that will give American businesses the certainty needed to make long-term investments here in the United States.”

The American Made Coalition has been supportive of Speaker Paul Ryan’s (R-Wis.) border-adjustment tax proposal, which taxes imports and exempt exports. But the proposal has faced pushback from lawmakers and other business groups, so it’s unlikely to be enacted.

In the comments it submitted Monday, the coalition said it thinks the border-adjustment tax can help transform the tax code to encourage businesses to make investments in the U.S. However, the group said it is “open to other solutions that achieve these three main objectives — permanence; territoriality; and a significant, globally competitive rate cut.”

This Week in Policy News

Do We Need a Border Adjustment? (Politico)

U.S. House Panel Approves Rroad Proposal on Self-Driving Cars (Automotive News)

Trump Administration Outlines Negotiating Priorities for NAFTA (The Hill)

Leaving NAFTA, Imposing Tariffs Would Drive Up Vehicle Prices: Study (Chicago Tribune)

Paul Ryan Just Made Trump’s Agenda A Lot Harder to Pass (The Washington Post)

This Week in Auto News

Cox Presents Rising Star Award to First Woman (Auto Remarketing)

Mercedes Targets Quad-Bike Loving Wealthy with Luxury Pickup (Bloomberg)

Automotive News Announces 40 Under 40 List (Automotive News)

Must Watch

Watch the latest video from Americans For Affordable Products, in which a manufacturing CEO responds to the myth that the BAT is good for U.S. manufacturing.

Friday Funny

Dude, where's my car?

A Syracuse teen has made headlines in Canada after losing his car because he couldn't remember where he parked for a rock concert.  Gavin Strickland, 19, drove across the border to see Metallica in Toronto, leaving his Nissan Versa in a parking garage and then taking a taxi to the show.  Afterwards, he couldn't remember where he left the car and spent hours looking for it, sleeping on benches before calling his parents to admit his mistake.

"I told him, 'don't come back to the U.S. without a car!'" Gavin's father Eric Strickland told the media with a chuckle.  "You can only do so much screaming at him," even though this is apparently the second time it's happened.

Gavin also forgot where he parked his car last winter when he went to another rock concert in New York but it was found by policy shortly thereafter. The Stricklands got lucky again when Gavin's car was found more than a day after posting a Craigslist plea for help. 

"Our doofy son parked the car in an indoor parking garage," the Craigslist ad said, offering a reward of $100 to anyone who could help find it. A photo was included, with details about its whereabouts: "near a Starbucks... a strange spiral outdoor sculpture, and possibly a bank- maybe RBC? The car has US Florida license plates, a small Canadian flag affixed to the door frame, and a Bernie Sanders bumper sticker."

The Stricklands are making a donation to the favorite charity of the woman who found the car. (Syracuse.com)

The Week in Review: July 10, 2017

SPECIAL EDITION: Border Adjustment Tax

Senate Committee Begins Work on Tax Reform; House Chair Says BAT Still In

As Congress returned to Washington earlier this week, the Senate Finance Committee announced that it would hold its first hearing on tax reform next Tuesday.  AIADA will submit written recommendations to the Committee on dealer priorities for overhauling the tax code, and most importantly, urging that the BAT not be included.

While at home during the July 4th district work period, Chairman Kevin Brady (R-TX) continued to assert that the BAT would be part of the House’s final legislation.  There have been no signals of support in the Senate for the BAT but continued outreach will be needed to ensure that it stays that way as the process moves forward.  The House must also continue to hear from dealers that the BAT is holding up tax reform and should be dropped TODAY.

Click Here to send an email to your Member of Congress.

Sign Up to invite your Member of Congress for a Dealer Visit.

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

Quotes of the Week

The border adjustment tax is really in trouble right now, there is not a lot of support for that.

-       Rep. Andy Biggs (R-AZ) (FOX Business)

I think the Phillies have a better chance of winning the World Series than a border adjustment tax being enacted into law.  The longer it remains a part of the framework, the more the chances of successfully completing tax reform decline.”

-       Rep. Ron DeSantis (R-FL) (The Washington Post)

"Small retailers are probably the business group that is hardest hit by the potential impact of the BAT, as they do not have the economies of scale to be able to reduce the higher costs of their merchandise with the BAT imposed and are most likely to lose sales to lower-priced competition.”

-       David French, Senior Vice President of the National Retail Federation (NRF.com)

Brady: Tax Reform, Including Border Adjustment Tax, Will Pass This Year (Houston Public Media)

Congressman Kevin Brady (R-The Woodlands) says he still aims to pass tax reform this year, even as Congress remains bogged down in the health care fight. The House Ways and Means chairman says the reform will include a controversial border adjustment tax.

Border adjustment is a form of consumption tax that lowers the cost of exports and raises the cost of imports. Speaking to Craig Cohen for Houston Matters, Brady said most of America’s trading partners already use such a tax. And the fact that the U.S. doesn’t is hurting its competitiveness.

“Our current tax code favors foreign products over made-in-America products here and around the world,” Brady said. “So what I’m proposing is that we have equal treatment, that every product coming into America or produced in America be taxed equally at the same low business rate of 20 percent.”

Brady said the change would discourage American companies from moving manufacturing jobs abroad. The Tax Foundation, a conservative think tank, estimates it would produce more than a trillion dollars in revenue over the next decade, helping to pay for cuts to corporate taxes.

But the proposal has run into stiff opposition both from Democrats and many Republicans. Critics argue it would hurt American consumers and retailers more than it would help manufacturers.

This Week in Trade & Tax News

Senate Finance Panel to Hold First Tax Reform Hearing Next Week (Washington Examiner)

The Border-Adjustment Tax, Tariffs, and More WTO Questions (National Review)

US Informs South Korea it Plans to Start Talks to Amend Trade Pact (CNBC)

The Rise and Fall (But Mostly Fall) of the Border Adjustment Tax (Washington Examiner)

Koch-backed Group Launches Ads Urging Lawmakers to Drop GOP Border Tax (The Hill)

This Week in Auto News

Jaguar E-Pace Leaps Into Compact SUV Fray (The Detroit News)

Love for SUVs and Pickups Surges to Record High (CNBC)

Infiniti Tops Sales-Prospects Survey (Automotive News)

Must Watch

Watch Veronique De Rugy of the Mercatus Center discuss the BAT in the latest video from Smart Tax Policy.

Friday Funny

“Clean” Getaway?

A woman was arrested for stealing another woman’s car from a car wash over the July 4th holiday weekend when a worker mistakenly handed her the car’s keys.  In the time between when the car was stolen and found, the suspect combed through the center console and ate snacks, and adding insult to injury, left crumbs behind. (Los Angeles Times)

The Week in Review: June 26, 2017

SPECIAL EDITION: Border Adjustment Tax

What’s More American on July 4th than

“Petitioning the Government for Redress of Grievances”?

Members of Congress are heading home today for the weeklong July 4th district work period and it’s a great time to reach out to them on issues of concern to you and your business, such as the border adjustment tax (BAT).  It is your right and responsibility as a patriotic citizen of the United States of America!

It has become clear to many in Washington that the BAT has become a ball and chain dragging down the chances for tax reform. Congress needs to continue to hear that they should not allow the BAT, which has scant support in the House and none in the Senate, to kill the chances of once-in-a-generation reform. Dealers must be heard loud and clear while Congress is at home during the holiday week that the BAT is holding up real tax reform and should be discarded once and for all!

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

SIGN UP to host your Member of Congress for a Dealer Visit!

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

 

In the latest Paul on Point, Are You There, Congress?  It's Us, the Dealers, AIADA Chairman Paul Ritchie discusses the recent auto industry meeting with the White House and urges Congress to get on the same page, drop the BAT and pass real reform.

Auto industry leaders, including AIADA Vice Chairman Howard Hakes, President Cody Lusk and Vice President of Government Affairs Rachel Robinson, pose for a quick photo wth Vice President Mike Pence before the auto industry discussion with White House Economic Council Director Gary Cohn and other Administration staff.
Quotes of the Week

“The two questions that have to be answered: when are we going to come to the realization the border adjustment tax cannot be part of real tax reform and are we going to hold up real debate on tax reform while we make that decision?”

-       Rep. Mark Meadows (R-NC), Chairman of the House Freedom Caucus (Washington Examiner)

“They’re going to have to show me how it does not violate international norms and how it really will work and how it’s not just another way of taxing people.”

-       Sen. Orrin Hatch, Chairman of the Senate Finance Committee (FOX Business)

“The bottom line is the Border Adjustment Tax…it’s a new tax. I didn’t get elected and run to institute new taxes on the American people. I ran to try to reduce their tax burden. I think the Border Adjustment Tax would have a lot of problems in terms of raising prices for consumers and hurting manufacturers that rely on foreign component parts. So, it’s not a good idea and I can tell you, politically, it doesn’t have the support. My fear is, I don’t think it will ever pass, but as long as it is in tax reform package, I think it makes it less likely that we will ultimately be able to get a successful package.”

-       Rep. Ron DeSantis (R-FL) (FOX Business)

GOP Chairman:  More Tax Reform Hearings Coming in July (The Hill)

House Ways and Means Committee Chairman Kevin Brady (R-Texas) said Monday that the panel will hold two more tax-reform hearings in July. One of the hearings will focus on the benefits of tax reform for small businesses, while the other will focus on the benefits for families and individuals, Brady said.

Tax reform is one of the top items on President Trump and congressional Republicans' agenda. Brady and other congressional leaders on the tax effort have been meeting regularly with Trump administration officials on the issue — most recently on Thursday.

"I think we continue to make good progress toward a single, unified tax-reform plan to be sent to the president's desk this year," Brady said.

The Ways and Means Committee held two hearings on tax reform in May. One centered on how tax reform could impact the economy, while the other focused on a controversial proposal to tax imports, known as border adjustment, that Brady and Speaker Paul Ryan (R-Wis.) have championed. Many of the witnesses at those hearings were business leaders.

Democrats have been pushing for additional hearings. Earlier this month, Rep. Lloyd Doggett (D-Texas), the top Democrat on the Ways and Means Committee's tax-policy subcommittee, urged Brady and tax-policy subcommittee Chairman Peter Roskam (R-Ill.) to hold a series of hearings about how tax reform would affect the middle class. Doggett also said that the witnesses should be more diverse and that Democrats should be able to invite more than one witness to each hearing.

Brady said that lawmakers haven't decided yet whether July's hearings would be convened by the full committee or by the tax-policy subcommittee.

This Week in Trade & Tax News      

House Budget Delayed as Freedom Caucus Seeks BAT Death Knell (Bloomberg)

The GOP’s Trillion Dollar Tax Problem (Politico)

Auto Industry Groups Urge Caution in Changing NAFTA Origin Rules (Reuters)

Trump’s NAFTA Victory Rides on Big Changes to How Cars Are Built (Bloomberg)

This Week in Auto News

The Cars.com 2017 American-Made Index (Cars.com)

Florida Dealership Protection Law Takes Effect (Automotive News)

Automakers, Analysts Trim 2017 Auto Sales Forecasts (The Detroit News)

Must Watch

Watch Rep. Jim Jordan (R-OH) tell FOX Business about concerns he heard from Honda about the BAT and that it should be dropped.

Friday Funny

Sen. Pat Roberts on Wednesday used a colorful animal metaphor to hint that GOP moderates and conservatives could still reach a deal on repealing ObamaCare.

When asked by reporters how the GOP could find common ground between the two sides, the Kansas Republican replied, "Even porcupines make love." (The Hill)

The Week in Review: June 19, 2017

SPECIAL EDITION: Border Adjustment Tax

Signs of Softening on Border Tax, But Still “Not Dead”

When news broke late last week that Speaker Paul Ryan was planning a “major” speech on tax reform in an address to the National Association of Manufacturers (NAM) on Tuesday, it was unclear whether he would continue to advocate for the BAT in his remarks, or perhaps push for the recent plan floated by Chairman Kevin Brady (R-TX) of a 5-year phase-in for the new tax. It turned out that he did neither.   

In a speech that stressed the need for permanent tax reform to be completed this year, the issue of the BAT, which is the single biggest impediment to getting real reform done, was, perhaps tellingly, glossed over. When questioned following his speech, he admitted that the BAT won’t pass in its current form, but insisted, despite mounting opposition, that it is not dead.

Dealers must continue to be heard loud and clear that the BAT is a non-starter and should be discarded once and for all so that we can move on to real pro-growth tax reform.

CLICK HERE to send an email to your Member of Congress. 

SIGN UP to host your Member of Congress for a Dealer Visit.

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

Quotes of the Week

“I am an automobile dealer… if you want to find something made in America, you certainly are not [going] to find it in anybody’s car showroom. It just doesn’t exist. The global supply chain necessitates that we have people from all over the world making small parts that go into big finished products. So, look, I get it, I tell you what, who else is going to get it at the end of the day, is consumers.”

            -Rep. Mike Kelly (R-PA) (Fox Business)

“The BAT would reward profitable, multi-national corporations that exploit special-interest loopholes by enacting a $1-trillion-dollar national sales tax on the backs of working households.”

            -David Williams, President, Taxpayers Protection Alliance (The Hill)

“The Senate won’t touch the BAT. The White House really seems ambivalent, at best, so I think you can assume there’s no BAT coming forward.’”

            -Rep. Chris Collins (R-NY) (The Wall Street Journal)

Dropping the BAT Is Key to Passing Tax Reform This Year (Reason.com)

House Speaker Paul Ryan just made his pitch to the country about tax reform. He wants it, and he wants it before the end of 2017 because, as he said in his prepared remarks, "we cannot let this once-in-a-generation moment slip by." That's all well and good, except that the main factor holding up tax reform is the speaker's insistence that the United States adopt a distortive and unfair border adjustment tax to pay for the reform.

In the best of circumstances, fundamental tax reform is difficult, but now it seems even harder, thanks to Ryan's refusal to move away from a proposed 20 percent tax on imports while giving a free ride to exporters. The whole point of fundamental reform is to cut taxes and grow the economy. Though the rest of the Republican tax plan is pro-growth, according to scores of the plan, the border adjustment tax wouldn't create any growth. Its only purpose would be to raise revenue, as Republicans are apparently once again refusing to pay for tax reform with spending cuts.

Though the speaker tried not mentioning the border adjustment tax, his speech made clear his commitment to his blueprint as originally proposed, which includes the BAT. Concocted by economists in the comfort of the frictionless world of an academic paper, it would allegedly raise $100 billion per year from importers and consumers while handing out more subsidies to giant companies such as Boeing and General Electric. If you think it reeks of the export mercantilism that plagues Washington, you're right, and that's hard to square with Ryan's talking point about the need to turn away from granting tax favors to special interests.

Those pushing for the plan also have the notion that the adjustment of the dollar resulting from the tax's implementation would compensate for the added tax burden. As a currency trader noted recently, building "an intergenerational tax reform based on the assumption of what the (foreign exchange) market will do is a laughable notion." If you think it sounds very risky and distortive, you're right. The result is a measure that has divided the business community, the Republican caucus and the free market policy world. And it has little chance of getting out of the House, let alone passing the Senate.

Yet Ryan and House Ways and Means Committee Chairman Kevin Brady continue to hang on to the divisive measure. In a new twist, they're now hoping they can fool the opposition by phasing in the tax over several years, as if implementing a bad idea slowly makes it any better. As Stan Veuger of the American Enterprise Institute recently observed, we shouldn't count on a phase-in improving it. The phase-in would be more distortive and increase the trade deficit for the first five or six years without increasing whatever little chances exist of reaching whatever currency adjustment would be necessary to offset the tax pain for importers. If anything, the prospect of trade deficit growth makes it even less politically acceptable to the Trump administration, which is already opposed to it.

I agree with Ryan that it would be a shame to miss this once-in-a-lifetime opportunity to implement fundamental tax reform. Yet he's the one who is derailing the effort with his insistence on the BAT's being part of his tax plan. If he dropped it, we could finally unite and start looking for alternatives (including spending cuts) to pay for the good reforms. If he doesn't, Republicans may have to add tax reform to their list of broken promises.

This Week in Trade & Tax News      

Paul Ryan: Border Adjustment Tax Not 'Dead,' But Not Going to Pass as Is (U.S. News & World Report)

Ryan Barely Mentions Border Adjustment in ‘Major’ Tax Speech (Morning Consult)

New Border Adjustment Tax Would Amount to $5 Trillion Tax on Consumers (The Hill)

Club for Growth Bashes Border Tax Ahead of Ryan Speech (The Hill)

Tax overhaul in Trouble as Opposition to Import Tax Grows (The Associated Press)

U.S. Trade Representative Lighthizer Says No Deadline Set for NAFTA Deal (Reuters)

This Week in Auto News

Best July 4th Deals on Cars Made in America (Consumer Reports)

Kia Leads J.D. Power Quality Survey (The Detroit Free Press)

Honda to Bow New Accord Next Month (The Detroit News)

Must Watch

Watch Rep. Mark Meadows (R-NC), Chairman of the House Freedom Caucus, tell FOX Business that there is agreement that we need to move beyond the border adjustment tax.

Friday Funny

Hate those fidget spinners?

Motor enthusiasts in Russia welded three cars together to make a giant fidget spinner and, well, almost succeeded in making it spin. (www.ABC2news.com)

The Week in Review: June 12, 2017

SPECIAL EDITION: Border Adjustment Tax

AIADA Meets with White House on Tax Reform/

BAT Architect Suggests 5-Year BAT Phase-in

Members of the automotive industry, including AIADA, participated in a meeting earlier this week with Gary Cohn, Director of the White House’s National Economic Council, to discuss tax reform.  AIADA Vice Chairman Howard Hakes, as well as President Cody Lusk and Vice President of Government Affairs Rachel Robinson, participated.   Hakes, a California dealer, made clear that while international auto dealers are supportive of pro-growth tax reform, we remain completely opposed to the BAT.  Vice President Mike Pence also stopped by briefly to say hello and take a quick photo.

Also this week, Ways & Means Committee Chairman Kevin Brady (R-TX) proposed a gradual, 5-year phase-in of the BAT to somehow soften the blow of the new 20% tax.  This will not work.

Bad policy is bad policy, whether now or five years from now, and dealers are urged to make their voices heard today. Contact your Member of Congress and urge them to drop the BAT so we can move on to true pro-growth tax reform!

CLICK HERE to send an email to your Member of Congress. 

SIGN UP to host your Member of Congress for a Dealer Visit.

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

Quotes of the Week

“We were grateful to have an opportunity to share our perspective with the White House, and we are optimistic that a well-crafted tax reform bill, minus the BAT, can make its way through Congress and to the president’s desk for his signature.”

            -Cody Lusk, President of AIADA (The Hill)

“The fight of the day, as you know, is about whether the border-adjustment tax would be acceptable if phased in over five years. Another way to ask the question is: Can you make a bad tax policy better by introducing it slowly? The answer is pretty clearly no.”

            -Veronique de Rugy, Mercatus Center (National Review)

“Proponents say that adding a border adjustment tax will make sure the tax reform legislation is "revenue neutral." That is Washington-speak for keeping the overall tax burden the same, but changing who pays the bill.”

            -Rep. Jim Jordan (R-OH) (Washington Examiner)

"I think the border adjustment tax, whether you phase it in or you put it in all at the same time, is D.O.A……the political reality is there are not the votes there for the border adjustment tax whether it's today, tomorrow, or in five years."

            -Rep. Mark Meadows (R-NC), House Freedom Caucus Chairman (Washington Examiner)

Auto Industry Leaders Raise Concerns about Border Tax in White House Meeting (The Hill)

Representatives of the automobile industry raised concerns about House Republicans' border-adjustment tax proposal during a meeting Wednesday with White House National Economic Council Director Gary Cohn.

“America’s international nameplate dealers fully support federal tax reform but remain deeply opposed to the [border-adjustment tax] provision, which would drive up the cost of every vehicle on their lots by an average of $2,000 per vehicle,” said Cody Lusk, president of the American International Automobile Dealers Association.

“We were grateful to have an opportunity to share our perspective with the White House, and we are optimistic that a well-crafted tax reform bill, minus the BAT, can make its way through Congress and to the president’s desk for his signature.”

The auto industry leaders' meeting with Cohn was one of several tax-reform listening sessions that the White House is holding with industry groups in the coming weeks. Since the White House released a tax plan in April, Trump administration officials have been meeting with business leaders and lawmakers as they work on crafting the details of a proposal.

This Week in Trade & Tax News      

White House to Meet with Car Industry on Tax Reform (The Detroit News)

Opponents Unswayed by Brady's Plan to Phase in Import Tax Provision (Politico)

Some Tax-Writers Raise Questions About Five-Year BAT Phase-In (Bloomberg)

Republicans Push Paul Ryan to Back Off Border-Tax Idea (The Wall Street Journal)

Rep. Jim Jordan: America-first Tax Reform Begins with Dismissing a Border Adjustment Tax (Washington Examiner)

This Week in Auto News

Most SUVs earn poor or marginal headlight grades (Detroit News)

Toyota CEO mulls deals 'to survive in the future' (Automotive News)

BMW 6-Series GT On Sale In The U.S. In November (Forbes)

Must Watch

Watch Chairman Kevin Brady (R-TX) propose 5-year rollout of BAT, missing the point that bad policy five years from now is still bad policy.

Friday Funny

Minor League Team Pitches Pregnancy Tests for Father's Day

A minor league baseball team in Florida has planned an unusual Father's Day promotion. The team will give out pregnancy tests.

This week Jacksonville Jumbo Shrimp have added a second promotion to the usual Thirsty Thursday celebration. They're calling it the "You Might Be a Father" promotion, which comes with a free pregnancy test.

The team's website explains it like this: The test will let men know if they should return to the Father's Day game on Sunday. (USnews.com)

The Week in Review: June 5, 2017

SPECIAL EDITION: Border Adjustment Tax

The BAT is still alive and part of the tax reform discussion!

Senator Orrin Hatch (R-UT), influential Chairman of the Senate Finance Committee, who had previously expressed opposition to the BAT, made comments earlier this week indicating that the BAT should remain “on the table” as an option to pay for proposed tax cuts.  The congressional architects of the Better Way tax reform plan, as well as pro-BAT American Made Coalition, also continue to push the BAT.

Contact your Member of Congress today so we can move on to true pro-growth tax reform!

CLICK HERE to send an email to your Member of Congress. 

SIGN UP to host your Member of Congress for a Dealer Visit.

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

Following the BAT hearing in the House of Representatives, AIADA submitted written testimony for the record to remind Congress of international nameplate dealers’ impact on their communities and the country and express continued opposition to the BAT.

Quotes of the Week

“As far as I’m concerned, virtually any potential [offset] for reduced tax rates should be on the table, and that includes the so-called border adjustment tax.”

            -Sen. Orrin Hatch (R-UT), Chairman of Senate Finance Committee (The Hill)

“The White House doesn’t like it, members don’t like it, employers don’t like it, and it’s bad for families who are going to have to pay more for the car they buy at Honda and the clothes they buy for their kids when they’re headed back to school.”

             -Rep. Jim Jordan (R-OH), a House Freedom Caucus co-founder (Washington Post)

"Anytime anyone starts talking about the border in Washington DC, chances are they're going to get it wrong.  When I first heard about the border adjustment tax, the hair on the back of my neck started to stand up."

            -Sen. John Cornyn (R-TX), (Fox Business)

“We didn’t campaign on introducing an entire new system of taxation into our federal tax system. We especially didn’t campaign on making working people pay more for their stuff at Walmart. So, I think that we should go back to the drawing board.”

            -Sen. Tom Cotton (R-AR), (The Mike Gallagher Show)

Brady Says BAT Still in Play as Congressional Leaders, Administration Meet on Taxes(Inside U.S. Trade)

House Ways & Means Committee Chairman Kevin Brady (R-TX) expressed confidence on Tuesday that his border adjustment tax proposal will make it into a final GOP tax reform package, although he acknowledged the political imperative of getting House and Senate Republicans and the White House behind one tax proposal.

The so-called BAT has encountered skepticism from both the Trump administration and Senate Republicans. Brady met Tuesday with Treasury Secretary Steven Mnuchin, chief economic adviser Gary Cohen and Senate Finance Committee Chairman Orrin Hatch (R-UT) in the latest of a series of meetings on tax reform.

Hatch after the meeting declined to comment on the BAT or other specifics, but said “we’re moving forward. We need to move pretty quickly during the summer. Everyone felt pretty good about it.”

Mnuchin told reporters “we had a very productive meeting with leadership. Gary and I talked about a lot of issues, and we look forward to working.”

Brady, before the meeting, defended border adjustability and charged that his proposal could be formatted in a way that resolves questions senators and the White House have raised regarding its economic impact. At the same time, Brady also said that he is strongly in favor of the House, Senate and White House coalescing around one tax reform bill.

Is the Border-Adjustment Tax Really Dead? (National Review)
That’s what Roll Call asserted on Tuesday: House Republican leaders’ controversial border adjustment tax is dead

So did the New York Times a few weeks ago: After months on life support, the border adjustment tax looks as if it’s finally dead.

Unfortunately, I am not sure it is dead enough. First, bad ideas, like government programs, never quite die in Washington. They resurface regularly and I expect this one to be no different. This is particularly true in this case since the Republicans and many of their allies seem to have accepted, or at least internalized, the idea that spending cuts and entitlement reforms may never happen. If that’s the case, they think we need to raise revenue to cut taxes so to simply make ends meet. How else can we explain the refusal by House Ways and Means chairman Kevin Brady, Speaker Paul Ryan, and others to push for spending cuts as a way to pay for some of the revenue losses?

How else can we explain their insistence that a very problematic destination-based border-adjustment tax (BAT) is the only way to alleviate the revenue gap created by the proposed tax reform? Because, that’s really the true argument for the BAT: Without the BAT, no overhaul of the tax system. Even the New York Times and Roll Call have been writing their stories linking the demise of the BAT to the end of any hope for fundamental reform. Chairman Brady even noted after a hearing on the subject, “If someone has a better solution, bring it.”
Heritage Paper: Congress Should Abandon Border Tax Proposal (The Hill)

The Heritage Foundation is arguing Thursday that Congress should pursue tax reform without a key part of the tax blueprint House Republicans released last year. The conservative think tank urged Republicans in a new paper to drop the border adjustment tax (BAT).

“The tax code is badly in need of an update, and true reform is possible without the border tax distraction,” Heritage policy analyst Adam Michel wrote in the paper. “Congress should move forward on reform without the BAT.”

The paper comes at a time when the BAT faces growing concerns from GOP lawmakers in the House and Senate, conservative groups, retailers and the White House.

The border-adjustment proposal involves taxing imports while exempting exports. Supporters of the proposal, such as House Speaker Paul Ryan (R-Wis.), argue that it would raise revenue that would help offset cuts to tax rates and would end an advantage that foreign-made products have over American-made products.

But the Heritage paper argues that the BAT “would carry substantial economic risk.”

This Week in Trade & Tax News      

President’s Tax Reform Push Enters Next Phase (The Hill)

GOP Claims Progress After Trump Administration and Leaders Meet on Taxes (Washington Examiner)

The Finance 202: Why Trump's Populist Agenda Is In Retreat (The Washington Post)

Buying More Chevys Won’t Fix Germany’s Imbalance (Wall Street Journal)

This Week in Auto News

Hyundai’s U.S. Sales Chief is Out After Tough Sales Month (Automotive News)

Nissan to Make Automatic Emergency Braking Standard in One Million U.S. Cars (Reuters)

Morgan Stanley Warns There’s a ‘Buyer’s Strike’ Coming for Cars (Bloomberg)

Must Watch

Watch the latest video from Americans for Affordable Products.

Friday Funny

It’s Important To Have Goals… 

Sean Corbett of Chandler, Arizona went to several Arizona motor vehicle licensing locations for two years before he found one that would let him take the photo with a pasta strainer on his head.

"It's kind of been a personal mission to keep pushing and not let the naysayers say I can't," Corbett told CNN.  Corbett calls himself a "pastafarian,"part of the satirical Church of the Flying Spaghetti Monster, who wears the item as part of his religious headgear.

Most states require people to take their driver's license photos free of headgear or other items, but exceptions are sometimes made for religious reasons. The Arizona Department of Transportation later said that while some exceptions are made for religious headwear, Corbett's colander getup probably shouldn't have been allowed, so the state is going to void the photo and driver's license.

If that happens, Corbett says he's prepared to wage a legal battle for the right to be photographed with kitchenware on his head. (CNN.com

The Week in Review: May 22, 2017

SPECIAL EDITION: Border Adjustment Tax

You Auto Know About the BAT Hearing

Earlier this week, the House Ways & Means Committee held a hearing, “Increasing U.S Competitiveness and Preventing American Jobs from Moving Overseas,” which was solely focused on the Border Adjustment Tax (BAT).  Pro-BAT witnesses included the CEO of Archer Daniels Midland Company, the former CEO of Walmart Stores, and a former George W. Bush Administration Economic Advisor, while anti-BAT witnesses included the CEO of Target Corporation and a Professor of Economics from Reed College.  Testimony from the hearing is available here

Though the witness list was crafted to be intentionally lopsided in favor the BAT, most press following the hearing was in agreement that opponents of the BAT scored a significant victory by highlighting the deep divisions the new tax creates.  With new defections by Republicans on the Committee and continued opposition from Democrats, it was made apparent that it would be a challenge to pass any legislation that includes a BAT. 

Following the hearing, AIADA released a statement reaffirming support for pro-growth tax reform but maintaining stringent opposition to the inclusion of a BAT.  Incredibly, some in Congress continue to push the BAT as a way to raise revenue to pay for tax cuts, and so we need your continued help.  Believe it or not, the BAT is still in the House Tax Blueprint. We need you and your team to help us finally close this sale and put the BAT to bed for good.

CLICK HERE to send an email to your Member of Congress. 

SIGN UP to host your Member of Congress for a Dealer Visit.

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

Quotes of the Week

“One of the problems with the Border Adjust[ment] Tax is that it doesn’t create a level playing field. It has very different impacts on different companies. It has the potential to pass on significant costs to the consumer.”

            -Treasury Secretary Mnuchin (5/23/17 Peterson Foundation Interview)

“I know we have to pay for these tax cuts, but I don’t want it to be on the backs of everyday hardworking American taxpayers.”

            -Representative Mike Kelly (R-PA) (5/23/17 Ways & Means Committee Hearing)

“What I think we should do is, cut taxes so families get to keep more of their money. Create a tax code that’s conducive to economic growth. And then cut spending. That’s what I thought the Republican Party was about. Not saying we’re going to lower some taxes and add a whole new tax. Right now, that’s what’s being talked about, is the Border Adjustment Tax. I don’t think that is what Republicans are about. So, let’s design a tax code that is conducive to growth.”

            -Rep. Jim Jordan (R-OH) (Fox Business)

“Under the new border adjustment tax, American families – your constituents – would pay more so many multinational corporations can pay even less.”

            -Brian Cornell, CEO of Target Corporation (5/23/17 Ways & Means Committee Hearing)

Border Adjustment Tax Proposal at Death’s Door (The Hill)

Speaker Paul Ryan’s (R-Wis.) border-adjustment tax proposal is increasingly looking like it’s on death’s door.

The proposal to tax imports and exempt exports has been facing long odds for several months, with retailers, conservative groups and senators warning that it would lead to consumers paying more for items such as clothes and groceries.

But in recent weeks and days, the concerns have been mounting from the White House and House Republicans.

“The BAT can’t pass without President Trump’s support. And it’s not clear it would pass with his support,” said Rep. Luke Messer (R-Ind.), who as GOP policy chairman is a member of Ryan’s leadership team.

“I think it’s going to be hard to get [the border-adjustment tax] through,” added Rep. Dennis Ross (R-Fla.), a senior deputy whip who is opposed to the tax.

Asked Wednesday if he thinks the border-adjustment tax is completely dead, Freedom Caucus Rep. Mark Sanford (R-S.C.) simply replied: “I do.”

For the first time, Ryan on Wednesday conceded that a House tax-reform bill might not include any type of border adjustability measure.

“That’s the kind of conversation we’re having [with the White House and the Senate],” Ryan, who has been forcefully defending the tax, said at an event hosted by Axios.

Ryan still offered a vigorous defense of the proposal, which he has long championed.

To read more from The Hill, click HERE.

Ryan: House Could Pass Bill That Doesn't Include Border Tax (The Hill)

Speaker Paul Ryan (R-Wis.) said Wednesday that he can see a scenario in which the House passes a tax reform bill that does not include a border-adjustment tax.

"That's the kind of conversation we're having [with the White House and the Senate]," Ryan said at an event hosted by Axios.

The border-adjustment tax (BAT), which would tax imports and exempt exports, was a key part of the tax plan Ryan released last year, but it is facing mounting opposition.

Treasury Secretary Steven Mnuchin publicly expressed concerns about the BAT at an event Tuesday hosted by the Peter G. Peterson Foundation, and he reportedly told House Freedom Caucus members in a private meeting that President Trump opposes the BAT. Additionally, Republicans on the House Ways and Means Committee were divided over the BAT during a hearing on the topic Tuesday.

Ryan said that congressional Republicans and the White House agree on about 80 percent of the elements of tax reform and are discussing how to broaden the tax base to pay for lower tax rates.

"A border adjustment basically taxes the trade deficit, gets you revenue to lower your tax rates," he said. "If you're not going to tax our trade deficit, like every other country does, then you'll have to get your base broadening from within the country. And that's the kind of conversation we're going to have all summer long."

To read more from The Hill, click HERE.

Border Adjustment Tax Proponents Struggle to Prevent More Republican Defections (The Washington Times)

House Ways and Means Chairman Kevin Brady mounted a renewed defense Tuesday for including a border adjustment tax in the Republicans’ proposed tax overhaul, but he is facing increasing defections from members of his party who say the tax is complicated and will end up socking consumers.

Seeking to inject new life into the proposal, Mr. Brady acknowledged “fair concerns” about it and said there is merit to the idea of phasing in the tax to give the economy time to adjust.

“I’m confident that we can bring forward the designs [and] the transition — very deliberate, very generous, including incorporating some of those issues in a way that we not just address it in the short term,” Mr. Brady, Texas Republican, said at an event hosted by the Peter G. Peterson Foundation.

A 20 percent border tax has become a centerpiece of the House Republicans’ tax overhaul, with Speaker Paul D. Ryan and other leaders saying it will level the playing field with other countries that impose similar taxes and protect American manufacturers.

Opponents counter that it will raise prices on goods sold inside the U.S.

“Under the new border adjustment tax, American families — your constituents — would pay more so many multinational corporations can pay even less,” Target CEO Brian Cornell testified to Mr. Brady’s committee on Tuesday.

To read more from The Washington Times, click HERE.

Treasury Secretary Suggests Trump Opposes Border Adjustment Tax (Huffington Post)

The Border Adjustment Tax may not be dead, but President Donald Trump himself may be giving up on making the controversial surcharge on imports part of a tax reform bill later this year.

Treasury Secretary Steve Mnuchin indicated during a private meeting with House Freedom Caucus members on Tuesday that Trump doesn’t support the Border Adjustment Tax.

“He indicated the president is not supportive of the BAT and that we should discuss other differences that might move things forward,” one Freedom Caucus member in attendance told HuffPost, requesting anonymity.

Freedom Caucus Chairman Mark Meadows (R-N.C.) said Mnuchin indicated that Trump is moving from a noncommittal, at times ambivalent, stance on the border adjustment tax to straight-out opposition.

“He said POTUS was concerned it would affect too many people adversely that are often forgotten in tax reform,” Meadows said.

A border adjustment tax, which still has the support of some GOP House leaders, would impose significant levies on imported goods from clothing to auto parts, driving up prices for Americans.

”It is somewhat of a tax on consumers,” another Freedom Caucus member, Rep. Rod Blum (R-Iowa), told HuffPost.

To read more from Huffington Post, click HERE

This Week in Trade & Tax News      

Border Adjustment Tax Faces Uphill Battle (US News & World Report)

GOP Divisions Appear to Grow Over Proposal for a Border Adjustment Tax (The Washington Post)

Mnuchin Cites Border-Tax Concern as House Panel Seeks Tweaks (Bloomberg)

Central Pillar of House Tax Reform Plan Draws Friendly Fire (Politico)

Target CEO Says Import Tax Bets 'Paychecks on an Untested Theory' (Minneapolis Star Tribune)

Challenges Facing Border Tax Plan on Display at Ways and Means Hearing (Morning Consult)

This Week in Auto News

Study: Small Cars More Prone to Driver Deaths (The Detroit News)

Ford Ousts Mark Fields as CEO and Installs Jim Hacket (The New York Times)

U.S. Justice Department Sues Fiat Chrysler Over Diesel Emissions (The Detroit Free Press)

Must Watch

Rep. Mike Kelly (R-PA) didn’t grow up on a laptop, he grew up on a blacktop, and he wants to hear from the people in the retail business about the actual effect the BAT would have on consumer prices.

Friday Funny

Rep. Jim Renacci (R-OH) hears CRICKETS when he asks hearing witnesses if they can assure him that currency will adjust under the BAT and there will be no effect on consumer prices.

The Week in Review: May 15, 2017

SPECIAL EDITION: Border Adjustment Tax

BAT Hearing Scheduled for Next Week

Following a general tax reform hearing held yesterday by the House Ways & Means Committee, it has been announced that a hearing focused on the BAT, “Increasing U.S Competitiveness and Preventing American Jobs from Moving Overseas,” will be held by the Committee on Tuesday, May 23rd. AIADA will submit written testimony for the hearing record and encourages dealers to continue reaching out to Congress to encourage pro-growth tax reform that does not include the harmful and divisive BAT.

If you are in the DC metro region and are interested in attending the BAT hearing, contact GovernmentRelations@aiada.org.

If you are unable to attend, there are still ways to have your voice heard before Tuesday’s important hearing:

 CLICK HERE to send an email to your Member of Congress. 

SIGN UP to host your Member of Congress for a Dealer Visit.

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

At a briefing for congressional staff hosted by Smart Tax Policy, AIADA President Cody Lusk participated in a panel discussion titled:  The Bad Policy and Politics of the Border Adjustment Tax, which was moderated by Veronique de Rugy of the Mercatus Center.  Other participants included Evan Alexander of Koch Industries, Rachelle Bernstein of the National Retail Federation, and Stephen Sanders of Flint Hill Resources. 

Quotes of the Week

“There’s no question that border adjustment doesn’t unify Republicans; it divides them.”

           – Rep. Tom Cole (R-OK), (The Hill)

“[The BAT]’s going to be tough to pass. I don’t think we can move it through the Finance Committee.”

           – Sen. Orrin Hatch (R-UT), Chairman of the Senate Finance Committee (Reuters)

"While a reduction in tax rates may be helpful in the short run, I believe our economy and our citizens need and deserve permanent, comprehensive tax reform that also improves America’s trade competitiveness. That is why the manufacturers I represent are so pleased that this committee has placed border adjustability at the center of its tax reform efforts so we can neutralize the border tax problems imposed on us by other countries and reclaim our competitive edge in international trade." 

          –Zach Mottle, Chief Alignment officer, Atlas Toolworks, (5/18 House Ways & Means Committee Tax Reform Hearing)

Ryan Vows 2017 Tax Rewrite as First Hearing Highlights GOP Split (Politico)

The House’s main tax-writing panel held its first hearing on how to overhaul the tax code Thursday, where Republican leaders continued to endorse far-reaching proposals that their Senate counterparts have rejected.

Kevin Brady, chairman of the House Ways and Means Committee, used the hearing to build support for the tax blueprint endorsed by Speaker Paul Ryan. Testimony from executives with AT&T Inc., Emerson Electric Co. and S&P Global Inc. touted the benefits of many of that plan’s provisions, including a measure that lets corporations immediately deduct the full value of their capital spending.

But the path forward for a successful tax overhaul got no clearer. Senate GOP leaders have criticized the two main revenue-raisers in the House plan -- imposing a border-adjusted tax on companies’ imports and domestic sales, and eliminating their ability to deduct net interest payments. Both would help pay for the steep tax-rate cuts that Republican leaders have pledged to deliver -- if the cuts are to be permanent under Senate budget rules.

For example, Senate Majority Leader Mitch McConnell said the border-adjusted tax “probably wouldn’t pass the Senate.” And Senate Finance Chairman Orrin Hatch said of ending interest deductibility: “I don’t think, in the final analysis, they’re going to be able to do that.”

That’s not stopping Ryan from remaining optimistic. “Our goal -- and I feel very confident we can meet this goal -- is calendar year 2017 for tax reform,” he told reporters at his weekly press conference Thursday.

To read more from Politico, click HERE

Brady Sets Border-Tax Hearing Even as McConnell Predicts Failure (Bloomberg)

House Ways and Means Chairman Kevin Brady is forging ahead and planning to hold a hearing next week on the proposed border-adjusted tax, even as the top Senate Republican said the measure probably won’t pass his chamber.

“One key element of that hearing will be border adjustment and the role that it plays as a crucial element in tax reform to level the playing field for made-in-America products,” Brady told reporters Tuesday.

The controversial provision is a centerpiece of House Republican leaders’ blueprint for overhauling taxes because it would raise more than $1 trillion over 10 years to help offset the cost of individual and corporate rate cuts. Brady and House Speaker Paul Ryan have continued to defend it, even as it’s faced attacks from industries that import goods as well as criticism from the White House and Senate Republicans.

To read more from Bloomberg, click HERE.

Ryan’s Border Adjustment Tax Is Likely Bad For The US Economy (The Daily Caller)

Speaker of the House Paul Ryan is adamant a border adjustment tax (BAT) is crucial for revitalizing the U.S. economy, but research published Tuesday morning illustrates the potentially negative impacts it imposes on American businesses.

To achieve President Donald Trump’s ambitious tax reform proposal, Ryan is pushing for a BAT tax that would levy a 20 percent tax on imports. It would allow U.S. companies to deduct the cost of goods made in America, but not ones made in foreign countries. It would reportedly raise over $1 trillion in federal revenue over the next decade, a much needed sum to finance the government while simultaneously slashing business and corporate tax rates by 15 percent.

Freedom Partners Senior Policy Advisor Alan Nguyen and Americans for Prosperity Deputy Director of Federal Affairs Mary Kate Hopkins published a report Tuesday examining how the proposed BAT tax would affect major U.S. industries. The researchers focused on areas of the U.S. economy that rely heavily upon imports, like manufacturing, energy, retail and agriculture.

Every good imported to the U.S.–from clothing to avocados to automobile parts–would be subject to a BAT tax, and, in turn, consumers would pay higher prices at the checkout counter, Nguyen and Hopkins report. American consumers could pay as much as 30 to 40 cents more per gallon of gas if Congress imposes a BAT tax. Manufactures could stand to pay an additional $67 billion in new taxes. The same story plays out for retailers and farmers.

To read more from The Daily Caller, click HERE.        

House GOP Not Sold on Ryan’s Tax Reform Plan (The Hill)

Dozens of Republican lawmakers are raising concerns or say they are undecided on Paul Ryan’s (R-Wis.) proposed tax on imports, suggesting the Speaker’s broader tax reform plan may not have the votes to pass the House.

The Hill has been tracking House Republicans’ positions on the border-adjustment tax for the last several months based on interviews with lawmakers and their aides, as well as comments made to other media outlets. Of the more than 50 GOP House members whose stances The Hill has learned, only about 15 appear supportive, while more than three dozen have either raised concerns about the provision or said they do not yet have a position.

Tax reform is unlikely to attract Democratic support in the House, so in order for a bill to pass, Republican leaders will need to minimize defections. 

Ryan’s proposal is designed to raise revenue by imposing a tax on imports while lifting a tax on products that are made domestically and exported to alleviate the cost of lowering tax rates. The Speaker argues this would foster investment in the United States and help U.S. manufacturers.

But the plan has powerful enemies in the business community and has received a cool reception from Republican senators, casting doubt on whether it could survive a vote in the upper chamber.

To read more from The Hill, click HERE.

This Week in Trade & Tax News              

Ryan: Tax Reform is Happening in 2017 (Politico)
House Republicans Move Forward with Their Tax Reform Agenda as if Nothing Happened (Vox)
Cohn, Mnuchin Visit Capitol Hill to Discuss Tax Reform (The Hill)
Retail CEOs Renew Border-Tax Fight at Meeting With Mnuchin (Bloomberg)
Top Tax Writer in House Won't Back Down on Offsetting Cuts (Bloomberg)
McConnell: Border Tax 'Probably Wouldn't Pass the Senate' (The Hill)
Trump Administration to Renegotiate NAFTA (Detroit News)

This Week in Auto News

Toyota, Honda Again 1-2 in North American Supplier Relations (WardsAuto)
Toyota Ramps Up SUVs (The Detroit News)
The Keys to Lamborghini's Future? Speed, Style, and SUVs (USA Today)

Must Watch

Watch Majority Leader Mitch McConnell (R-KY) predict the BAT’s chances in the Senate.

Friday Funnies

To me, a hedge fund guy is a guy who plants shrubs.  You are not a car guy.” 

         -Rep. Mike Kelly (R-PA), addressing Steve Rattner, Chairman of Willet Advisors LLC, former Counselor and Lead Auto Advisor to the United States Secretary of the Treasury at 5/18 Ways & Means Committee Tax Reform Hearing

Way better than stale pretzels!

Struggling with a lack of space at his sports car showroom, a Singapore dealer was inspired by a vertical display of Matchbox cars while shopping at the toy store with his son.  He turned his vision into a 148-foot tower, or “vending machine” serving up Ferraris. (CNN Money

The Week in Review: May 1, 2017

SPECIAL EDITION: Border Adjustment Tax

Tax Reform Next on Agenda

The House of Representatives is preparing to return home for another week-long recess and as always when they are back in the district, it is the perfect time to reach out to them, invite them for a dealer visit or attend a town hall.  Following Thursday’s vote to repeal Obamacare, it is widely expected that upon returning to Washington on the week of May 15, the House will now turn its full attention to tax reform. 

The House plan STILL contains the BAT and House leadership has indicated their intention to continue advocating for its inclusion, arguing that it is needed to generate the revenue necessary to pay for the tax cuts.  Congress needs to continue to hear from dealers that the BAT is a non-starter and will kill the chances of passing meaningful, pro-growth tax reform.

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.

And don’t forget to sign up to host your Member of Congress for a Dealer Visit!

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

AIADA President Cody Lusk participated last week on a panel discussion, Tax & Trade:  Changing Border Tax Policies and the Impact on U.S. Business, hosted by Bloomberg Government.  To watch a replay of the discussion, click HERE.   (Begins at approximately 47:00 mark).

Quotes of the Week

“My guess is based on the reception here in the Senate, with many people skeptical of how it would work, the border adjustment tax is probably dead. ... Now that I've had a chance to talk to [Ways and Means Committee] Chairman Brady in the House and majority leader in the Senate the goal is going to be unify the House and the Senate and White House behind a single tax plan which does not include the border tax."

                -Senator John Cornyn (R-TX), on conference call with reporters

“Let me be clear about why a BAT is even being considered: The only reason that Republicans are willing to endure this risky scheme is because they are being held hostage to the faulty logic that their tax cuts must be revenue-neutral in a static analysis. This demand that tax cuts be "paid for" will act as a brake on economic growth and force us down rabbit holes like the BAT proposal.”

                -Arthur Laffer, founder and chairman of Laffer Associates and former member of President Ronald                Reagan's Economic Policy Advisory Board throughout his two terms (The Washington Examiner)

“Comprehensive tax reform is long overdue. Americans deserve much, much better. The president’s newly offered plan to reduce rates and simplify the code is a step in the right direction. I am also encouraged by the absence of Congress’ proposed border adjustment tax (or any tax) that would increase the profits of industrial companies such as Koch by raising the price on goods that Americans rely on every day.”

                -Charles Koch, Chairman and Chief Executive of Koch Industries (The Washington Post)

Border Adjustment Tax to Cost Car Owners $160 More Per Year for Auto Repairs and Maintenance (Autocare.org)

The Auto Care Association warned lawmakers on May 3 that the proposed Border Adjustment Tax (BAT) on imports would significantly increase auto repair and maintenance costs for the average car owner in the United States. 

The BAT, which would impose a new 20 percent tax on imported goods and services, would result in a $20 billion per year tax increase on automotive parts. For the average family, this would mean a $160 increase in annual auto repair and maintenance costs, to about $1100 per year, according to an analysis of the tax conducted by the Auto Care Association. With the average age of a vehicle on the road at 11.6 years, and the industry’s data showing that middle and lower income households tend to drive the oldest cars, this group would be susceptible to even larger increases in their repair bills should the BAT become law. 

“The Border Adjustment Tax will drive up auto repair costs to about $1,100 per year for car owners,” said Bill Hanvey, president and CEO, Auto Care Association. “This is also a highly regressive tax that will hit working families the hardest because they tend to drive older vehicles that require more repair work and maintenance. The BAT will hurt middle class consumers and have a chilling effect on small businesses that conduct auto repair work and serve as a source of good-paying jobs in every community in the country. The Auto Care Association strongly urges Congress and the Trump Administration to reject this ill-conceived tax increase.” 

To read more from Autocare.org, click HERE.

Opinion: If Retail Politics Doesn’t Kill This $1 Trillion Tax, the Supreme Court Should (The Washington Post)

With the effort to repeal and replace Obamacare continuing to struggle in the House, the Trump administration and congressional Republicans are understandably eager to notch a major policy win and fulfill a Trump campaign promise. Thus, congressional leaders are turning their attention to the great white whale of their policy agenda: tax reform.

Like Moby Dick, the opportunity to enact tax reform surfaces only rarely, and it has a penchant for turning on those who, like Captain Ahab, pursue it too closely.

In fact, a squall of serious dimensions is already appearing on the horizon. A centerpiece of the Republican leadership’s tax-reform plan is a new $1 trillion tax that proponents call a “border adjustment.” Not surprisingly, many members of Congress are hearing from constituents opposed to being “adjusted” to the tune of a $1 trillion, and Republicans in both houses of Congress are talking openly about a mutiny. The Republican leadership’s proposed “border adjustment” sounds a lot like what United Airlines might call a “re-accommodation.”

And, it would be unconstitutional.

To read more from The Washington Post, click HERE.

Mnuchin Downplays Border-Adjustable Tax, Citing Other Pay-Fors (Tax Analysts)

There are many ways to raise revenue for tax reform other than the border-adjustable tax, Treasury Secretary Steven Mnuchin said May 1, identifying it as a sticking point in discussions between the House GOP leaders who support it and an unpersuaded White House.

 Mnuchin also said tax reform would likely exclude infrastructure spending. President Trump said in an interview with Bloomberg the same day that he would be willing to consider a gas tax increase to fund infrastructure, though whether he was drawing a connection to tax reform is unclear.

Trump also told Bloomberg that he would like tax cuts to be permanent. Mnuchin said April 26 that while a permanent tax cut would be preferable, if it is possible to do only a 10-year cut under the Senate reconciliation rules that Republicans will likely use to circumvent Democratic opposition, “we’ll do that.”

The president wants tax reform to close the so-called carried interest loophole, White House Chief of Staff Reince Priebus told ABC’s This Week April 30, reviving a stance Trump campaigned on. However, the former Republican National Committee chair seemed to hedge May 1, telling CBS This Morning that “I think you're probably going to see” carried interest closed in tax reform. “If it was up to the president, it'd be gone,” Priebus said.

Mnuchin cast the border-adjustable tax as unessential to tax reform during an on-stage interview with Fox Business Network at the Milken Institute Global Conference in Los Angeles.

To read more from Tax Analysts, click HERE

The Looming Clash Between Trump and Republicans on Taxes (The Atlantic)

When the White House released President Trump’s one-page sheet of principles for tax cuts, Republican leaders in Congress said it would serve as a “guidepost” for their efforts to overhaul the tax code.

Not even a week later, the GOP is already veering off the Trump trail.

Trump is prioritizing steep rate cuts for businesses and individuals that wouldn’t necessarily be offset by increases elsewhere. The resulting spike in the long-term deficit—which fiscal policy analysts predicted could total several trillion dollars—would likely force Congress to make them temporary in order to comply with budgetary rules allowing Republicans to avoid a Democratic filibuster.

That’s not what Republicans on Capitol Hill had in mind.

Leaders of the tax-writing House Ways and Means Committee emerged from a two-day summit on Monday intent on drafting legislation that would clash with the president’s plan in key areas. They would rewrite the tax code without an expiration date, and they have recommitted to a hotly-contested levy on imports—known as the border adjustment tax—that could raise about $1 trillion in revenue over a decade to pay for cuts elsewhere. “We’re committed to permanence,” said Representative Peter Roskam of Illinois, who leads the panel’s subcommittee on taxation. “We’re committed to making sure this is paid for, and we’re committed to making sure we win this great debate and persuade others as well.”

To read more from The Atlantic, click HERE

This Week in Trade & Tax News

House Tax-Panel Chairman Still Committed to Border-Adjusted Plan (Bloomberg)

Arthur Laffer: Trump's Tax Plan Should Follow the Reagan Model (The Washington Times)

Trump Open to Raising Gas Tax and Negotiating Tax Overhaul Plan (Bloomberg)

Bernanke Says the Much-Criticized Border Adjustment Tax has 'A Lot Of Appeal,' but GOP is Botching the Sell (CNBC)

This Week in Auto News

Auto Dealers Decide Cars Are Taking Up Too Much Prime Space (The Wall Street Journal)

The Best Car and Crossover Lease Deals Under $200 A Month (Forbes)

Are You Up Or Down? Franchise Values In Motion (Kerrigan Advisors)

Must Watch

Watch AIADA President Cody Lusk on a panel discussion hosted by Bloomberg Government: Tax & Trade:  Changing Border Tax Policies and the Impact on U.S. Business. (Begins at approximately 47:00 mark).