Comprehensive tax reform is long overdue—hardworking Americans deserve to keep more of their money, and government could be more responsible with the money it already has.
But, if the Border Adjustment Tax currently under consideration in Washington becomes law, it would functionally slap a 20 percent tax on imported products–a cost that will be paid ultimately by American consumers in the form of higher prices for basic, everyday essentials.
From everyday items to major purchases, Americans can expect to pay more for what they want and need. If you can afford the added costs, you should only be so lucky. Some estimates show that in the near-term, the border adjustment tax could create a dramatic increase in unemployment to levels not seen since the post-financial crisis highs of 2010.
What do the increased costs mean for you and your family? Take a look below at eight things you can expect to become more expensive as a result of this new tax plan.
1. Food- Do you like avocados? Tomatoes? How about mushrooms? Since we import much of our produce from other countries, you can expect to have to pay more for some of your favorite foods.
2. Beer and Liquor- From summer staples like Corona to almost any brand of Tequila, some of our favorite spirits are brought in from other countries. That might be good news for your liver, but it’s bad news for your wallet.
3. Electronics- Since many electronic goods are produced overseas, their cost will go up. Your next iPhone will likely be even more expensive—since different stages of Apple’s production takes place in other countries, the company could have to raise prices after its tax bill spikes.
4. Gasoline- Few things will make Americans feel the wrath of the new border tax more than when they go to the pump. Gas prices are projected to rise more by more than a half dollar as a result of the tax.
5. Clothing and Fashion- Twenty years ago, 46 percent of apparel was made in the U.S. and ten years ago, that number was down to 10 percent. Now, only 2.7 percent of apparel is made here. That means that the vast majority of clothing, since it will be taxed more heavily under this plan, will likely cost more for consumers.
6. Cars- Audi, BMW, Honda, Hyundai, Land Rover, Mercedes, Toyota, Volkswagen… if you’re a fan of any foreign-made car or SUV, be prepared to cough up more to drive one. A border tax could even drive up prices for American-made cars, as well, because many components are imported.
7. Home Appliances and Hardware- Stores like Home Depot import much of their inventory, and the Border Adjustment Tax would create tax bills that exceed the operating profit of many of them. These stores may increase their prices to prevent themselves from being swallowed up.
8. Discount Goods- Everyone’s favorite discount stores—Dollar Tree, Target, Wal-Mart and others—will be hit hard because of the tax. Since these retailers are major importers, their increased costs will be passed right on to the consumer—making their discounted items not so affordable.