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