A key element of Congress’ tax reform could be the introduction of a border adjustment tax (BAT), which would levy a 20-percent tax on all U.S. imports while eliminating the tax on exports. The proposal poses a discriminatory tax on all imported products—including promotional products—and is anticipated to hurt American consumers and the nation’s largest employers by increasing the cost of everyday products.
In a letter to Maine’s Congressional delegation, Gene Geiger, MAS+, CEO of Lewiston, Maine-based distributor Geiger, explained, “Based on our calculations, our selling prices on import products would have to increase by at least 20 percent. Even if some products come back to our shores, their prices to us will be targeted at the new +20-percent level, certainly not where our prices are today. So, our selling prices will likely rise by roughly the same amount across the board. Our customers will not increase their marketing budgets by an extra 20 percent, so, they will buy fewer products or buy lower-priced products.”
A large percentage of promotional products are manufactured overseas and imported to the U.S. In PPAI’s assessment, the border adjustment tax will hurt the promotional products industry. The Association asks industry members to add their voice to the Association’s and tell their member of Congress to reject the border adjustment tax and instead focus on implementing tax reform that continues to spur economic growth that’s not at the expense of American families.
Follow this link to send a message to Congress: Proposed Border Adjustment Tax—Bad For The Promotional Products Industry.