MEMA Applauds Decision to Proceed Without BAT on Tax Reform

Date: July 28, 2017

MEMA supports and appreciates the joint statement released this week by the White House and Congressional leaders that tax reform will proceed without a Border Adjustment Tax (BAT).

MEMA has been actively involved in discussions regarding tax reform, advocating for initiatives that will increase American manufacturing employment without putting an integrated supply chain and jobs at risk. 

  • This spring, MEMA submitted comments to the House Ways and Means Committee and Senate Finance Committee, supporting tax reform and expressing concerns with the Border Adjustment Tax.

  • MEMA members traveled to Capitol Hill to meet with key Congressional representatives during our annual Legislative Summit in May and again in July to discuss the impact of the Border Adjustment Tax on the supplier industry.  

  • In July, MEMA released a study which examined the real-world implications of a border tax —how it would impact new-vehicle and supplier costs, new-car features and prices, consumer purchases, jobs, and trade. The study, commissioned MEMA and conducted independently by the Boston Consulting Group (BCG), found that with a 15% BAT, U.S. automakers (OEMs) and suppliers would pay $34 billion in import taxes annually while realizing only $12 billion in export benefits, costing U.S. automakers and suppliers $22 billion a year, net. This translates into an average $1,000 increase in per-vehicle manufacturing costs at the top 12 OEMs selling cars in the U.S.; a 20% BAT would add an average of $1,800 to per-vehicle production costs.

Suppliers will continue working with Congress and the administration to simplify the tax code and reduce rates in order to strengthen our global manufacturing competitiveness, which is needed for growth and investments here in the United States.

For more information, please contact Tom Lehner

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