Border tax will cripple companies like mine

As the president of a housewares and cleaning products company, I’m constantly trying to think of new ways to help my company thrive, thereby creating more good-paying jobs for families in New York state.

In that frame of mind, I am very concerned about the movement in Washington to create a new tax, or increase tariffs on imports, because it has the potential to cripple my business and many others like it.

{mosads}The specific tax that’s been proposed, known as the border adjustment tax (BAT), is a part of what I believe to be a well-intentioned plan to help our economy grow and create more, better-paying jobs. But what the individuals who have proposed this tax don’t understand is that a border adjustment tax has the potential to cause massive job losses in this country. 

My company is Casabella, a small player in the $85 billion houseware products industry. We pride ourselves on our ability to create housewares and home products that are great looking, fun and functional at the same time.

We started the company 30 years ago by identifying this unique niche in the commodity category and began by importing already-designed products from Italy. About 15 years ago, we began employing our own industrial designers and invested in innovation under our own brand. This homegrown innovation was made possible by the availability of contract manufacturers overseas, primarily in China. 

We always seek, and sometimes find, American producers to make our products. Our buckets, large plastic products, and sponges are made in the U.S. But housewares that require bristles, multiple materials, or manual labor are essentially impossible to make in America for a price the consumer can afford. 

The history of American manufacturing is based on vertical integration. Companies invented and produced their own products, limiting their facilities to their own inventions. As a result, a fork in the road evolved where American entrepreneurs were able to take their own innovation and source production into the open arms of factories in China and elsewhere.

Just like Apple and many other U.S.-based businesses, we have grown a company that supports jobs at home, focused on creativity and distribution of goods. Unlike businesses that relocate to reduce labor costs or taxes, Casabella has only increased local employment through our 30-year life. That could change if a tax on imported goods is imposed.

If we are forced to pay a tax on goods that we design but are produced elsewhere, we won’t be able to afford to continue doing business as we do today. Most likely, we will be forced to reduce the size of our workforce here.

We’re not alone in this — it’s a problem faced by companies across America. A University of Maryland study completed in January showed that a border adjustment tax could lead to a “dramatic spike in unemployment levels” not seen since 2010, with jobs losses in some sectors estimated at 20 percent.

If the government imposes a tariff, or border tax, on our imported goods, who will pay the price? Undoubtedly, it will be the consumer. Everything — basic houseware products, clothing, toys, electronics, etc. — will go up in price. According to the National Retail Federation, the BAT could cost American families $1700 a year in increased consumer goods cost.

As a result of increased prices, consumers will purchase less, leading to a profit loss for companies and subsequent job reductions. World class innovation and uniqueness will diminish in our market because they will be priced out of consumers’ reach.

Besides, do we only want American made products to be available here? What happens to the unique products the world currently offers to our dynamic market, like Italian pasta, French wine, or high-quality electronics from Asia?

Are we expected to produce everything we need here in America? The bottom line is that tariffs will increase the cost of American innovation and stifle our marketplace. 

I believe Casabella represents the best that America has to offer — intellectual property developed and owned in the United States, people employed in both white and blue collar jobs, a clean and environmentally sensitive operation, and taxes paid to the U.S. government, based on profits earned worldwide. Does that make my company bad for the country?

Bruce Kaminstein is the president of Casabella, a home products company located in Congers, New York.

The views expressed by contributors are their own and not the views of The Hill.