A proposed border adjustment tax would increase the average auto owner’s vehicle repairs by $160 annually, the Auto Care Association told U.S. lawmakers.
The border adjustment tax (BAT), proposed by House Republicans, would remove tax breaks for American companies importing goods and provide a tax break for companies that export. The tax is intended to encourage companies to manufacture goods in the United States and drive up demand for American goods.
In order for the BAT to be successful, the dollar must rise in value by 20 percent. If not, the cost of all imported goods would increase, costing the average household $1,700 extra annually.
A 20-percent increase on imported auto parts would cost Americans $20 billion annually.
“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,” Auto Care Association President and CEO Bill Hanvey said. “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.”
The average age of an American vehicle is 11.6 years and repairs cost the average household $940 annually.