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25-PERCENT DUTY ON MULTI-PURPOSE VEHICLES: A HUGE TAX INCREASE ON THE MIDDLE CLASS

 25-PERCENT DUTY ON MULTI-PURPOSE VEHICLES:
 A HUGE TAX INCREASE ON THE MIDDLE CLASS
 ALEXANDRIA, Va., March 4 /PRNewswire/ -- The American International Automobile Dealers Association (AIADA) issued the following:
 The Senate tax bill would add thousands to the cost of minivans and sport-utility vehicles through a huge tariff increase on these vehicles -- and middle-class Americans would foot the bill. "The Senate tax bill is hypocrisy -- on the one hand, the Senate bill would give middle class Americans a $300 tax break, but on the other hand, it would force middle-class Americans to pay thousands more for their minivans and sport-utility vehicles," said Walter E. Huizenga, president of AIADA. "This debate over the tariff classification of these vehicles is just another thinly disguised consumer rip-off by the Big Three.
 "The Big Three now want the Senate to do for them what they themselves could not achieve in the marketplace -- namely, eliminate a competitor," Huizenga said. "This 1,000 percent tariff increase is blatant protectionism and invites the type of retaliation that could lead to a trade war with Japan and the European Community." Sen. Donald W. Reigle (D-Mich.), on behalf of Detroit's Big Three automakers, has added a measure to the Senate tax bill that would raise the tariff on imported minivans and sport-utility vehicles to 25 percent from 2.5 percent by reclassifying these vehicles as trucks rather than passenger vehicles.
 "This tariff increase would devastate the thousands of dealers who sell these imported multi-purpose vehicles and would allow the Big Three to raise prices on their vehicles," Huizenga said. A 25 percent tariff on minivans and sport utility vehicles would add anywhere from $1,500 to $6,000 to the cost of an imported minivan or sport-utility vehicle. This huge tariff increase could significantly reduce or eliminate these vehicles from the U.S. market, as stiff price increases could price many of them out of reach of middle class American consumers. Auto dealers would suffer severe financial losses, as reduced volume or elimination of these popular vehicles would significantly hurt sales and profitability. These vehicles are a significant percentage of sales and profits for dealers. Severe product and/or profit reductions would result in layoffs and, in some cases, closed dealerships.
 If these vehicles are priced out of the market, it would result in a loss of revenue for the U.S. Treasury, not a gain. As severe price increases reduce sales, government revenues will decline.
 AIADA is the trade association of America's international automobile dealers, representing more than 10,000 American businesses selling and servicing world class automobiles.
 -0- 3/4/92
 /CONTACT: Paul Donnellan of the American International Automobile Dealers Association, 703-519-7800/ CO: American International Automobile Dealers Association ST: Virginia IN: AUT SU: LEG


MH-DC -- DC022 -- 5126 03/04/92 16:37 EST
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Publication:PR Newswire
Date:Mar 4, 1992
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