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Opposition to Border Adjustment Tax Grows


As previously reported, Congress is considering imposing a “Border Adjustment Tax” (BAT). The BAT would levy a 20 percent tax on imported goods, in the hopes of raising over a trillion dollars of tax revenue over the next decade. The purported benefits of a border adjustment tax is to give tax breaks to American companies that ship products to other countries, and to eliminate tax breaks from American companies that import goods from other countries.

While aimed at penalizing companies that produce goods overseas, the actual cost of the BAT tax would be borne by U.S. consumers. Items like gasoline, clothing, food, automobiles, electronics – and, yes, aftermarket repair parts – would cost the American consumer much more. As reported in an article written by Jon Barela on thehill.com website, a UBS Securities analyst estimated that “average prices in the U.S. could rise by a whopping 8 percent.”

Proponents of the BAT say it will create new domestic jobs by driving up the value of the U.S. dollar by 20 percent. The truth is, if the value of the dollar does not rise steeply and quickly, the U.S. economy will likely take a huge hit, as the cost of goods rising sharply to cover the extra 20 percent tax. And many experts are not confident this will happen. According to thehill.com article, Federal Reserve Chair Janet Yellen, testifying before the House Financial Services Committee, said “[t]he problem is there’s great uncertainty about how in reality markets would really respond to these changes” when questioned on whether or not the dollar would appreciate under a BAT.

It is important that you understand how the Border Adjustment Tax would work, how it will affect your business, and what you can do to prevent it. The first step is education. You can read more about the pros and cons of the BAT here:

Then get in touch with your state’s U.S. Senators and your district’s U.S. Representative to voice your concerns and displeasure about the BAT.

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