We’ve already discussed how the border adjustment tax (BAT) could impact your favorite retailer. Now a new report from Freedom Partners and Americans for Prosperity shows just how bad the 20 percent import tax would be for states. Some key points from the report:
Top States Impacted by the BAT are:
6. South Carolina
4. New Jersey
The BAT Disproportionally Hurts Millennial Jobs.
Retail and manufacturing are two of the top employers for millennials, and those industries would be severely impacted by a 20 percent tax on imports.
The auto industry is a great example of how the BAT hurts manufacturing jobs. Domestic carmakers count on a global supply chain for the cars and parts they build in the U.S. The BAT could force them to increase the cost of each car made here by $2,000, potentially leading to sluggish sales and lost jobs. That could have a ripple effect on the rest of the economy, hurting sales and jobs at auto suppliers and car dealerships.
Millennials who count on part-time or summer jobs at their local retailers could see those jobs dry up as well. The report says retailers employ more than 10 percent of private employees in every state. “It’s easy to see how devastating a BAT could be for the retail industry, which faced with skyrocketing tax bills, would need to raise prices, cut jobs, or shut their doors altogether.”
The BAT Could be Devastating for Small Businesses.
Small businesses with under 250 employees make up 95 percent of companies who import. Those companies “could see their tax bills skyrocket to unsustainable levels.” The report highlights several stories of what the proposed tax could mean for them:
“The story is the same for small businesses across the country. Katherine Gold, CEO of an Aurora, Colorado-based children’s shoe store, said her company does not have the cash cushion to absorb the impact of the BAT and that it ‘would put us out of business if we can’t pass [the cost of the tax] on immediately.’ Shuttering the company would put more than 100 people out of work.”
The BAT Makes Life More Expensive For Millennials.
A 20 percent tax on imports will eventually be passed on to consumers in the form of higher prices. Americans would see higher price tags on the things they regularly buy, from t-shirts and tennis shoes to gas and groceries. Millennials are the driving force behind the consumer spending market, so higher prices will disproportionately impact younger shoppers the most.
Lawmakers should definitely be pursuing tax reform. Overhauling our broken and inefficient tax code is critical for restoring opportunity and prosperity in America, but hitting Millennials with a 20 percent tax on imports to pay for special interest handouts isn’t the right approach. This new consumer tax undermines the larger effort and places new, unfair burdens on Americans, especially younger Americans. The BAT consumer tax has no place in comprehensive tax reform.
To read a full copy of the study, download it here.