The Auto Care Association warned lawmakers recently 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 $1,100 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.”
The Auto Care Association is part of Americans for Affordable Products, a national coalition of 400 businesses and trade associations, that is opposing the BAT. In addition to the higher auto repair costs it would create, the BAT has been estimated to cost the average American family $1,700 per year in higher prices on everyday consumer items, such as gasoline, groceries, clothing, shoes and prescription medicines. This tax hike would burden middle class households who have seen their wages stagnate in recent years, while enabling profitable, multi-national corporations that already avoid paying their fair share of taxes to operate virtually tax-free, according to the association.
