AutoCare Insider Volume 105 - 10

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BORDER

ISSUE

Congressional leaders have proposed a Border Adjustment Tax (BAT), a
revenue-generating tax reform provision that would prevent U.S. companies
from deducting costs of imported goods when calculating taxable income.
This would apply to ALL IMPORTED GOODS from EVERY COUNTRY.

HOW WILL IT AFFECT
YOUR COMPANY?

EXAMPLE
Annual Sales

 Cost of imported goods - raw
materials, components and
finished products - can no
longer be deducted when
calculating taxable income.

Cost of Imported Products
Taxable Income

TAXES YOU OWE

 Even with a decrease in the
corporate tax rate from 35
percent to 20 percent, the
inability to deduct these costs
would result in a significant
increase in taxes due to a
higher taxable income.

$200,000

$200,000

$-150,000 (Deductible)

$-150,000 (Not Deductible)

$50,000 at 35% (Current Rate)

$200,000 at 20% (New Rate)

$17,500

$40,000

 Prices would increase throughout the supply
chain, with added costs ultimately being
passed down to the end consumer.
 Americans will have to pay more for everything
from parts to routine maintenance.
 The effects would be most felt by lower- and
middle-income families who are already
struggling to pay for necessities.

 Plug your company's
numbers into the table (to
the right) to see what your
new tax liability would be.

AUTO CARE INSIDER |

Under BAT

HOW WILL IT AFFECT YOUR CUSTOMERS?

 Early estimates indicate that
import-heavy companies
would have to pay three
or four times their gross
income in taxes.

10

Now

 Learn about the impact on consumers at
www.keepamericaaffordable.com.

VOL. 105

TAKE ACTION!
Send an opposition letter to your
members of Congress.
Visit www.autocareadvocacy.org
for more information.
http://www.autocareadvocacy.org http://www.keepamericaaffordable.com
Table of Contents for the Digital Edition of AutoCare Insider Volume 105
