Border Tax Will Increase Average Car Price By $2,000, Auto Rep Says

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Jack Crowe Political Reporter
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Auto industry stakeholders criticized the border adjustment tax (BAT) during a meeting with president Donald Trump’s chief economic advisor Gary Cohn Wednesday.

The BAT, which is a value added tax on imports, would drive up the average cost of an automobile by $2,000, according to Cody Lusk, president of the American International Automobile Dealers Association.

“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,” Lusk told the Hill.

Cohn’s face-to-face with auto industry leaders is the latest in a series of meetings with various industry groups held to gain feedback on the GOP tax plan released in April.

Association of Global Automakers president and CEO John Bozzella joined Lusk in ruling out the inclusion of the BAT in any viable tax reform plan.

“To grow our highly innovative and globally competitive auto industry, it is imperative that the BAT not be part of any tax reform proposal,” Bozzella told the Hill.

The BAT, which was included as part of a House GOP tax plan released last year, is intended to encourage companies to move jobs back to the U.S. The tax has been heavily criticized by lawmakers, administration officials and businesses who have argued the tax will result in higher prices for consumers.

Treasury Secretary Steve Mnuchin reportedly called the tax “dead” in a conversation with Democrats on the House Ways and Means Committee in May.

Despite Mnuchin’s opposition, the tax has been kept alive by Kevin Brady, GOP chair of the House Ways and Means Committee. The Texas congressman has been the most vocal supporter of the BAT but he recently moderated his position. Brady presented a plan Tuesday to phase in the BAT over five years in an apparent response to criticism.

Critics of the BAT have argued the tax will remain an impediment to American businesses regardless of whether it is phased in or applied all at once.

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