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).

The Week in Review: April 24, 2017

SPECIAL EDITION: Border Adjustment Tax

Trump Plan Released, BAT Not Included!

Earlier this week, President Trump released his long-awaited plan for tax reform.  AIADA was pleased to see that it did not include the Border Adjustment Tax (BAT) and applauded him for supporting pro-growth reform that would not levy a new 20% tax on imported goods to the detriment of American consumers. 

While it’s great news that the Administration’s plan does not include the controversial BAT provision, there is still work to be done to kill it once and for all.  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.

Quotes of the Week

“I am glad that the administration has decided not to adopt the destructive border-adjustment tax provision included in the House Republican Blueprint. The proposal was divisive and was getting in the way of tax reform in the name of revenue neutrality…That being said, we should stay vigilant because bad ideas never die.

             -Veronique De Rugy, Adjunct Scholar, Cato Institute and Senior Research Fellow, George Mason University (National Review)

"What this is about is creating jobs and creating economic growth.  And that's why massive tax cuts and massive tax reform and simplifying the system is what we're going to do."   

            -United States Treasury Secretary Steve Mnuchin (Speech at the White House)

“The Border Adjustment Tax is a classic example of insanity….Imports are to be taxed as they come into the country. This will make imports more expensive than domestically produced items. This ignores the fact that some imported items cannot be easily replaced by domestically produced items and it also ignores the fact that the cost of this tax is simply passed along to the consumer.”

            -Judson Phillips, Founder, Tea Party Nation (The Washington Times)

Ways and Means Republicans to Discuss Tax Reform Next Week (Morning Consult)

Republican members of the House Ways and Means Committee will meet next week to initiate efforts aimed at bringing their tax plan in line with the recently introduced White House outline, Chairman Kevin Brady (R-Texas) said Thursday.

The Texas Republican told reporters that the two-day policy conference, scheduled to start on Sunday, will focus on bringing the “strongest, most thoughtful solutions to the table as we visit with the Senate and the White House.” He said members will discuss how to reconcile their push for a border adjustable tax on imports, among other issues, with Senate and White House priorities.

The outline of the White House’s tax plan, released on Wednesday, omitted references to border adjustment or a proposal that would allow businesses to fully expense capital investment.

House Republicans want to be on the same page with the White House before moving ahead with tax reform legislation, Brady indicated. That means the panel likely won’t vote on a measure before the Trump administration releases further details about its plan later this year.

“I’m willing to adjust my schedule for the sake of us unifying around” a plan, Brady said.

To read more from Morning Consult, click HERE.

Import Tax is Off Trump's agenda, But It's Not Completely Dead (The Washington Examiner)

Retailers breathed a sigh of relief Wednesday as the Trump administration excluded the House Republican import tax from its new tax reform principles.

Industries that rely on imported goods waged a high-profile campaign against the border-adjusted tax over the past several months and earned a victory Wednesday as President Trump declined to endorse it.10:56

Yet border-adjusted tax opponents and advocates hinted Wednesday that the victory is not permanent and that the reform idea could resurface in further talks.

"We will not relent in our efforts to ensure a border adjustment tax has no place in any tax policy," said Joshua Baca, the spokesman for Americans for Affordable Products, in a statement on Trump's tax reform outline. Baca's group is the main anti-border tax advocacy group, made up of companies such as Walmart, Macy's and many others.

To read more from The Washington Examiner, click HERE.

Brady Intends to Continue Pushing Border-Adjustable Tax (Tax Analysts)

House Ways and Means Committee Chair Kevin Brady, R-Texas, will continue to push for his proposed border-adjustable tax regardless of whether it is included in President Trump's imminent tax plan.

The border-adjustable tax, an element of the destination-based cash flow tax proposal in House Republicans’ “A Better Way” tax reform blueprint, has been the focal point of debate surrounding the House tax reform plan. While it has drawn vocal supporters and detractors, the Trump administration has been lukewarm to the idea and is reportedly not planning to include it in its tax reform plan expected to be announced April 26.

Still, Brady told reporters April 25 that he’s not giving up on the proposal and that he will continue to make the case that “with changes, modifications and transitional rules,” the issues that have been raised with the proposal since it was first introduced can be addressed and lead to “a good solution.”

To read more from Tax Analysts, click HERE.

Opinion: Why Americans Can’t Afford to Ignore the Border Adjustment Tax  (The Hill)

With Congress returning from Easter recess next week, the debate over the border adjustment tax (B.A.T.) rages on. The most recent claim by supporters is that it’s unfair to focus on the 20 percent tax hike on all imports—including finished products, intermediate parts, or raw materials—without also accounting for the benefits of other proposals included in the House Republican tax reform plan.

In other words, pay no attention to the new, trillion-dollar tax behind the curtain.

In reality, Americans simply can’t afford to ignore the impact this devastating proposed tax would have on their businesses and family budgets.

For starters, the border adjustment tax is laser-focused on importing businesses. This means that, even though there are other tax cuts in the plan, importers would face higher—and in many cases substantially higher—tax bills. These targeted companies would bear the large burden of paying for the rest of tax reform and at a price they can’t afford.

To read more from The Hill, click HERE.

This Week in Trade & Tax News         

Small Retailers Add Emotional Punch in Bid to Kill Border Tax Plan (The Boston Globe)

Mnuchin Pledges ‘Biggest Tax Cut and Largest Tax Reform’ in U.S. History (The Washington Times)

Trump Team Unveils Sharp Cuts in Corporate and Individual Taxes (Financial Times)

Editorial: Trump’s Tax Principles (Wall Street Journal)

Republicans Tell Trump to Hold Up on NAFTA Withdrawal (Politico)

This Week in Auto News

BMW Dealers Cry Out for More 5 Series (Automotive News)

Cars Are Sitting on the Lot Longer, Even as Dealers Sweeten Their Offers (CNBC)

U.S. Auto Sales Forecast to Slip in April as Retail Demand Slumps (Automotive News)

Must Watch

Watch the latest video opposing the BAT from the Americans for Affordable Products.

Friday Funny

Mood ring for the new millennium?

Remember how great mood rings were in their pre-millennium heyday? BMW has reportedly taken that idea and pushed it into the 21st century.  The MINI VISION NEXT 100 “recognises its users, which allows it to offer personalised mobility.” And based on how the driver is feeling or what he or she wants to look like behind the wheel, “(t)he use of colour on the exterior and the projections onto the exterior panels can change” as well.  (USA Today)

 

The Week in Review: April 3, 2017

SPECIAL EDITION: Border Adjustment Tax

Time for Action as Congress Heads Home!

As Congress heads home from Washington for the two-week April work period, it is the perfect time to engage with them on the BAT.  Many will be hosting town halls, forums and district meetings, and looking for more opportunities to interact with their constituents.

And as some in congressional leadership begin to talk about potential modifications to the tax reform proposal, the hard reality is that the impact of a BAT cannot be softened by any transition rules or implementation period.  It is imperative that dealers deliver the message while Congress is at home that a new tax now, a year from now, five years from now or ten years from now is STILL A NEW TAX!

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.

Quotes of the Week

“In my business, if I want to cut my car prices to try and sell more cars, I don’t raise prices, I lower prices and cut expenses.  That’s what you do in your family, that’s what we all do. This is no different. And a five percent border tax increases the cost of goods, it flows to the consumer and it’s just a tax increase.” – Representative Roger Williams (R-TX) (McClatchy)

"Does it raise costs for every consumer in the country? You bet it does. By and large those taxes fall most heavily on the middle class and the poor." – Former Senator Bob Packwood (R-OR) (The Oregonian)

“We’re not supportive of any trillion-dollar tax increase on millions of American consumers, whether now or down the road.” - Mary Kay Hopkins, Senior Policy Advisor, Americans for Prosperity (McClatchy)

“The GOP has to get rid of [the] border adjustment thing, it’s splitting the business community and they all need to be on board.” Chris Edwards, Director of Tax Policy Studies, Cato Institute (McClatchy)

Like Trumpcare, Border Tax Could Roil Congress (Automotive News)

So unpredictable is the Trump administration that even the guy who follows Washington for thousands of auto dealers isn’t ready to venture a guess on whether an import tax will show up in the president’s tax reform plan.

“I can’t begin to read the tea leaves of what this administration is going to do with one thing or another,” said Cody Lusk, president of the American International Automobile Dealers Association, which represents dealers of foreign brands.

But if the so-called border adjustment tax, or BAT, does make an appearance, it could very well divide Congress the same way the failed replacement for Obamacare did.

On Thursday, Trump took a shot at the group of conservative Republicans who helped scuttle the health care plan in the House of Representatives. “The Freedom Caucus will hurt the entire Republican agenda if they don’t get on the team, & fast,” he wrote on Twitter.

That sounded like a pre-emptive strike for the coming clash over tax reform.

To read more from Automotive News, click HERE.

A Tax at the Border Could be the Next Big Republican Disagreement in Congress (McClatchy)

President Donald Trump wants to tackle tax reform after his health care overhaul failed, a massive effort considering the nation’s tax code hasn’t changed substantially since Ronald Reagan’s administration.

Trump has a fellow businessman in Congress eager to tackle taxes. Rep. Roger Williams, the longtime Weatherford, Texas-based car dealer who now lives in Austin, proposed his own tax reform plan a year ago in anticipation of a friendly face in the White House. Now, he wants to work with Trump to get something done.

But there’s a potential hangup.

A tax reform proposal cannot increase the federal deficit after 10 years, or else it will need 60 votes in the Senate to pass, and Republicans only hold 52 seats. So House GOP leadership must raise taxes or cut spending to pay for a lower tax rate.

The current proposal, trumpeted by House Speaker Paul Ryan and Ways and Means Committee Chairman Kevin Brady, also a Texan, imposes a border adjustment tax on imported goods. The tax will supposedly raise $1.2 trillion over 10 years to offset decreased federal revenues due to lower corporate and personal taxes, and its proponents argue the tax will benefit American-based manufacturing.

But the border adjustment tax is a non-starter for Williams and some Senate Republicans.

To read more from McClatchy, click HERE.

Ryan’s Border Tax on the Ropes as Trump Ponders Overhaul Plan (Bloomberg)

Donald Trump’s surprising election and his promise to overhaul the U.S. tax code set off celebrations across corporate America -- but some industries had barely applauded before they began gearing up for a fight.

Trump’s win gave Republicans control of the U.S. government for the first time in a decade and quickly drew attention to a tax plan that House Speaker Paul Ryan unveiled last summer with little fanfare. Ryan’s radical tax-code rewrite would replace the corporate income tax with a 20 percent tax on businesses’ domestic sales and imports; their exports would be exempt.

Cue the alarm bells for import-heavy companies like Wal-Mart Stores Inc., Target Corp. and Nike Inc. Retailers, apparel-makers, shoemakers, automakers and others unleashed one of their most robust lobbying and public-relations pushes in recent memory against the so-called “border-adjusted” tax. Buttressed by more than 10,000 phone calls to congressional offices, by a parody-style TV ad that aired during “Saturday Night Live” and by a succession of Republicans who’ve expressed concern about the plan, the opponents’ efforts appear to be winning. So far.

To read more from Bloomberg, click HERE.

Conservatives Attack Proposed U.S. Border Tax (Reuters)

Conservative activist groups that generally support Republicans but oppose a pro-export, anti-import Republican tax proposal, released a study on Thursday estimating its impact on individual U.S. states, underscoring the party's division over taxes.

With taxes at the top of Republican priorities, the two groups, backed by the wealthy Koch brothers, reported that seven states won by President Donald Trump in November's election would be among the 10 hardest hit by the proposal.

Freedom Partners and Americans for Prosperity, both based in the Washington area, said the "border adjustment tax," or BAT, would harm all 50 states, but that those heavily dependent on imports could suffer most.

The report predicted economic harm to Georgia, Kentucky, Louisiana, Michigan, South Carolina, Tennessee and Texas - all states Trump won in the 2016 presidential election. The list of hard-hit states also includes California, New Jersey and Illinois, which were carried by Democrat Hillary Clinton.

To read more from Reuters, click HERE.

This Week in Trade & Tax News         

House Tax Committee Plans Public Hearings on Tax Overhaul (Reuters)

Columbia Sportswear Takes Industry Fight Against GOP Border Tax to Capitol Hill (The Oregonian)

Conservative Split Over Import Tax Imperils Trump’s Overhaul (The New York Times)

Top House Tax Writer Signals Two Controversial Taxes Would Have Trouble Clearing Congress (CNBC)

AFL-CIO Chief Pitched Trump on Climate Benefits of Border Tax (E&E News)

Opinion: The Border Adjustment Tax Would Unleash World Trade Disorder (Richmond Times-Dispatch)

This Week in Auto News

Auto Sales Lose Momentum Heading Into Spring (Market Watch)

U.S. Auto Industry Faces 2004-Style Triple Threat: Deutsche Bank (Bloomberg)

Kicking Tires, in Virtual Reality (Automotive News)

MUST WATCH

Watch Rep. Ron DeSantis (R-FL) tell Fox Business why he opposes the BAT.

Friday Funny

“Hail to the Ferrari”

A Ferrari once owned by President Trump was sold at auction this weekend at a record $270,000. The 2007 Ferrari F430 F1 Coupe was purchased new by Trump a decade ago and he sold the supercar in 2011 with fewer than 2,400 miles on it.  The vehicle changed hands again on Saturday at an Auctions America event in Florida. The auction house did not name the buyer or the seller.  The cherry red Ferrari rolled onto the auction block as "Hail to the Chief" boomed from the speakers. (CNN Money)

Note: The Week in Review will be on hiatus until the week of April 24th, when Congress returns to Washington.  But, remember, when Congress is “out,” grassroots activity at home should crank up! 

The Week in Review: March 27, 2017

SPECIAL EDITION: Border Adjustment Tax

Congress Turning Attention to Tax Reform…and the BAT.

As Congress turns its attention to tax reform and the proposal put forth by House Republican leadership, there is growing opposition to the BAT. We are seeing some signals that our message, and that of a broad coalition of concerned industries, is getting through on Capitol Hill.  While this is good news, we cannot let up on the pressure on lawmakers to kill the BAT, once and for all.

 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!

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.

Quotes of the Week

“We think this is bad for consumers, it’s bad for the economy, it’s bad for people who voted for the president and for those Republican members of the House and the Senate. They didn’t vote for a tax increase.”

               -  Matt Shay, CEO, National Retail Federation (Fox Business Network)

“It’ll destroy Arizona’s economy. That’s my only concern. First thing will happen is there’ll be retaliation. You think the Mexicans are going to sit still for it?”               

             -   Senator John McCain (R-AZ) (Arizona Republic)

 “House Republican leaders…are hoping to raise another trillion dollars or so through a border adjustment tax…The problem is that this might increase costs for a small little subset of the economy called ‘importers’—everyone from oil refiners to big retailers like Walmart—and another called ‘consumers.’”

              -  Jim Newell, Staff Writer (Slate)

Opinion: Godfather Of Republican Border Adjustment Tax Plan Was A John Kerry Adviser (Daily Caller)

Could a Berkeley college professor who once advised the presidential campaign of 2004 Democratic presidential nominee John Kerry derail the best opportunity for conservative tax reform in three decades? 

As implausible as this may sound, it could well prove true if the Republican leadership in the U.S House of Representatives continue to insist on the inclusion of the so-called Border Adjustment Tax (BAT) in their tax reform legislation.

Alan Auerbach, the director of the Robert D. Burch Center for Tax Policy and Public Finance at the University of California, Berkeley, is the godfather of the BAT.  This tax, which would apply to all U.S. imports, would effectively function as a massive national sales tax estimated to generate a whopping $1.2 trillion of revenue for government coffers over the next decade. 

The fact that House Republicans are turning to a liberal professor on one of America’s most left-wing campuses for inspiration on tax reform is a bizarre turn of events.

To read more from Daily Caller, click HERE.

Opinion: Trump Should Ditch Border Tax (The Detroit News)

In his recent Detroit roundtable meeting with auto industry leaders, President Donald Trump pledged to make the U.S. the “car capital of the world again.”

He wants to see new modern auto plants built in Michigan and throughout the Midwest. To help prime the pump for the industry, the president pledged that he would reopen a review of the unreasonable Obama-era fuel economy mandates.

This is a welcome first step, but if Trump truly wants to instill a “buy American, hire American” vision, he must abandon the Border Adjustment Tax being pushed by his own party in the House of Representatives.

If passed, the BAT would impose a 20 percent tax on all goods imported in the U.S., including many of the parts that go into today’s U.S. auto fleet. By some estimates this could increase the cost of a new vehicle as much as $2,500.

To read more from George Sharpe, Jr. and Detroit News, click HERE.

House GOP Won’t Defer to White House on Tax Reform (Politico)

The White House says it’s driving the train on tax reform, and House Republicans don’t want to end up tied to the tracks.

They’ve been working on their own tax-reform proposal for more than a year and, after countless hours of work, don’t want to suddenly give up those designs just because the administration is now working on its own plan. Some worry the White House could drop a policy bomb in their midst just as reform seems within reach for the first time in decades.

“They’re going to have to come fully armed to defend it,” warns Rep. Kenny Marchant, a Republican tax writer. “We’re not discouraging other ideas,” but “they’re going to need to be prepared to do more than just, ‘I woke up last night, in the middle of the night, and thought this was a good deal.’”

His Ways and Means colleagues have been working on this “puzzle” for months, said Marchant.

Trump will huddle on tax reform today with Gary Cohn, the director of the National Economic Council; Treasury Secretary Steven Mnuchin; his chief strategist Steve Bannon; son-in-law and adviser Jared Kushner; Shahira Knight from the National Economic Council; and Craig Phillips and Justin Muzinich, both from Treasury.

To read more from Politico, click HERE.

Trump Wants a Win, But This Tax Plan Is a Loser (Bloomberg)

Now that President Donald Trump has failed to repeal and replace the Affordable Care Act, he’s turning to tax cuts to get a much-needed political win. There’s just one problem: What the Republicans want violates international law. If the reform bears any resemblance to the leading proposal, favoring corporate exports over imports, it’s going to get the U.S. sued in the World Trade Organization -- where it will lose.

It’s conceivable that Republicans won’t care about the defeat or the trade sanctions from other countries that the tax plan would likely bring. But ignoring the real-world consequences of the proposed reform would be self-destructive. It won’t mean a win for the Trump administration, not even the short term.

The House Republican tax plan was released in June 2016. Its central logic is to give an advantage to U.S. exports while taking advantages away from imports. The wisdom of that approach is open to discussion, but I’ll leave that issue to the economists.

The most pressing legal difficulty is that the proposal’s very objective is in tension with the treaties the U.S. has signed that commit it to the basic principle of international trade law: in particular, the commitment not to treat goods made outside the country differently from goods made inside.

To read more from Bloomberg, click HERE.

This Week in Trade & Tax News         

Americans for Affordable Products Grows to More Than 400 Strong (KeepAmericaAffordable.com)

Trump’s Team Eager to Woo Democrats on Tax Reform (Politico)

An Influential GOP Senator Throws Cold Water on the Polarizing House Border Tax Provision (CNBC.com)

Japanese Manufacturers Brace for Possible U.S. Import Tax: Reuters Poll (Reuters)

German Official: BAT A ‘Significant Concern,’ Does Not Fit With VAT System (Inside U.S. Trade)

This Week in Auto News

Discounts to Drive U.S. Sales to Best March Since 2000, Analysts Say (Automotive News)

Deep Subprime Auto Loans Are Surging (Bloomberg)

After 41 Years, Honda’s Mendel Drives Off (Automotive News)

Must Watch

Watch as Representative Mike Kelly (R-PA) argues against the BAT on Fox Business Network.

Friday Funny

Fast Arm of the Law…

The Interior Ministry in Rome, Italy recently unveiled its newest crime-fighting weapon: a 200 mph Lamborghini Huracan. In addition to the as-standard all-wheel drive and aluminum-carbon fiber hybrid chassis, the Huracan comes equipped with crime-fighting gadgets, including an on-board police tablet computer, the standard cop-issue gun holster, portable extinguisher, VHF police radio and even hooks to hold the "paletta," the traditional hand-held red-and-white "stop" sign, in place. (CNN.com)

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)