Car repair costs would rise $160 under BAT

BETHESDA, Md. — Implementing a "border adjustment tax" (BAT) on imported goods would result in a $160 increase in annual auto repair and maintenance costs for the average family, according to the Auto Care Association (ACA).

The Republican leadership in the U.S. House of Representatives floated the idea of a BAT earlier this year in the run-up to budget negotiations.

Under the BAT, U.S. companies would pay virtually no corporate taxes simply because they export products, while other American companies selling imported goods would face taxes of up to 20 percent on the value of those goods.

"The BAT will drive up auto repair costs to about $1,100 per year for car owners," said ACA President and CEO Bill Hanvey.

"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.

As a result of its analysis, the ACA "strongly urges Congress and the Trump Administration to reject this ill-conceived tax increase," Mr. Hanvey said.

The ACA is part of a coalition of 400 trade associations and businesses, Americans for Affordable Products (AAP), that have joined together to lobby against BAT.

Other entities that are part of AAP include: Automotive Aftermarket Association Southeast Inc. (AAAS), AutoZone, California Automotive Wholesalers Association (CAWA), International Franchise Association (IFA), Montana Tire Dealers Association (MTDA), National Retail Federation (NRF) and the Retail Industry Leaders Association (RILA).

According to the ACA, the BAT would result in a $20 billion per-year tax increase on automotive parts.

The ACA said it took into account the average age of a vehicle in the U.S. — now up to 11.6 years — the fact that middle and lower income households tend to drive the oldest cars in arriving at its conclusion.

In addition to higher auto repair costs, it's been estimated the average American family would spend $1,700 more per year on everyday consumer items, such as gasoline, groceries, clothing, shoes and prescription medicines, because of higher prices caused by the BAT.