Opinion: Border Adjustment Tax is a Gamble, Says Sen. Tom Cotton
The U.S. tax code is a mess, and Congress should eliminate all the special-interest loopholes in the code and use that money to cut taxes for everybody — including American businesses. Sen. Tom Cotton writes in a USA Today opinion piece that right now, some of his colleagues are working on a tax reform bill that would do just that. But he says he has grave reservations about one idea that’s being considered. It’s called a border adjustment tax, and here’s how it would work: We’d cut the corporate tax rate, and to make up for the lost revenue, we’d tax businesses whenever they bought something from another country. So, for instance, every time Ford bought an auto part from Canada, it would pay a 20 percent tax. Or every time your local grocery store brought in bananas from Guatemala, it would pay a 20 percent tax. And whatever money businesses made from selling their products in other countries would be exempt. But what all of this would really amount to is a 20 percent tax on imports. A bill that raises working families’ taxes and increases the price of the things they buy every day is hardly the way to create opportunity for all Americans. Read the rest of Sen. Cotton’s opinion piece here.
BMW CEO to Accompany Angela Merkel in Meeting with Trump
President Donald Trump will meet Friday with German Chancellor Angela Merkel and a group of prominent German CEOs with a vested interest in maintaining a beneficial business relationship with the U.S., reports FOX Business. Among the CEOs joining Merkel is Harald Krueger, CEO of automaker BMW. In a statement to FOX Business, BMW Group’s head of business and finance communications said “We understand from the German government that one of the main topics for the business delegation will be to discuss training initiatives. Well-trained people working in our manufacturing and sales operations in the U.S. are the basis for our success in this country.” The proposed border adjustment tax is expected to be among the topics Merkel will bring up in her meeting at the White House. Merkel called the U.S. border-adjustment tax a “protective tariff” and has said Berlin would consider retaliating with higher taxes on American businesses, according to Germany’s Der Spiegel magazine. For more on today’s meeting between President Trump, German Chancellor Angela Merkel, and BMW CEO Harald Krueger, click here.
Trump Budget Plan Would Scrap Energy Grants, Auto Loan Program
The Trump administration on Thursday proposed eliminating Energy Department loan programs and some research funding for energy efficient technology and electric vehicle development at three carmakers as the industry shifts more of its focus to electric and self-driving vehicles. Reuters reports that the White House budget blueprint proposes ending the Advanced Research Projects Agency-Energy (ARPA-e) program, which gives $300 million a year in grants for research in a wide variety of technologies aimed at reducing fossil fuel consumption and improving energy efficiency. The White House would also eliminate a U.S. Energy Department clean vehicle loan program that boosted Tesla Inc, Nissan Motor Co, and Ford Motor Co during the last industry downturn, but hasn't funded a new project in six years. For more on which auto-related programs would be impacted by President Trump’s budget blueprint, click here.
Buick, Lexus Return to Top Spots in Service Satisfaction Scorecard
Buick and Lexus regained their familiar top rankings in J.D. Power’s latest scorecard of satisfaction with dealership service departments, helping the U.S. industry improve for a second straight year, reports Automotive News. Lexus returned to No. 1 for luxury brands after a three-year absence. Before that, Toyota’s luxury brand had a five-year win streak. Lexus’ CSI score was 874, up five points from a year earlier. The results marked the seventh time in the last eight years that the overall industry score rose, with the only drop occurring in 2015. In the latest survey, J.D. Power pointed to improvements in overall service quality and the performance of service advisers while noting that franchised dealers’ service departments far exceeded the ratings of independent service shops. Rounding out the top five luxury brands were Audi (the 2016 leader), Lincoln, Porsche and Cadillac. The industry average for luxury rose five points to 859. For more on J.D. Power’s service satisfaction scorecard, click here.
Car Industry Players Diverge on Timescale for Self-Driving Cars
Carmakers and suppliers gave widely differing timelines for the introduction of self-driving vehicles on Thursday, showing the uncertainties surrounding the technology as well as a split between cautious established players and bullish new entrants, reports Reuters. Chipmaker Nvidia, facing direct competition with the world's top chipmaker after Intel's $15 billion deal to buy autonomous driving technology firm Mobileye this week, gave the most optimistic predictions. Chief Executive Jen-Hsun Huang forecast carmakers may speed up their plans in the light of technological advances and that fully self-driving cars could be on the road by 2025. Germany's Bosch, however, the world's biggest automotive supplier, gave a timetable as much as six years longer to get to the final stage before fully autonomous vehicles, and declined even to forecast when a totally self-driving car might take to the streets. Progress is fraught by issues including who is liable when a self-driving car has an accident, bringing down the costs of sensor technology and guarding against hacking. For more on the timeline for self-driving cars, click here.
What Could the Border Adjustment Tax Mean for Your Dealership?
On the heels of AIADA’s Washington, D.C., Border Adjustment Tax (BAT) Fly-In this month, join AIADA for a special AutoTalk session with AIADA President Cody Lusk on Tuesday, March 21, for an in-depth look at the issue and its importance to international nameplate dealers. The 20 percent BAT is a provision in the “Better Way” tax proposal, which is currently being discussed in the U.S. House of Representatives. Lusk will provide insight into the status of this destructive tax proposal and its potential ramifications for dealers and their businesses and take questions from participants.
Topics covered in this special AutoTalk webinar will include:
Just what is the BAT?
Who is proposing the tax, and is it part of a larger tax plan?
Does the tax apply to vehicles assembled in the U.S., like the Toyota Camry? Or does it only impact cars and light trucks that are imported into the country?
What is the projected impact on the annual vehicle sales rate?
How will this affect consumer affordability?