Transition Underway; 106th Congress Adjourns
Bush Pledges to Pursue Tax Cut Package

Washington is finally in a state of transition as President-elect George W. Bush meets with leaders on Capitol Hill and outlines his legislative priorities for the coming year. Pledging to move forward his conservative agenda in spite of an evenly divided Senate and tight GOP margin in the House, Bush said the case for his $1.3 trillion tax cut "is even more solid today than it was a year ago." Democrats were quick to volley back that such an agenda is at odds with Bush's call for cooperation across party lines. Referring to the tax package, Senate Democratic Leader Tom Daschle said, "I can't think of anything that would divide this nation more quickly right off the bat."

Death Tax Tops AIADA Agenda

For automobile dealers, chief among the tax concerns to be addressed is the estate tax. AIADA has lobbied vigorously in support of elimination of the death tax, which can be devastating to family-owned automobile dealerships. A stand-alone bill for repeal was passed by both the House and Senate but was vetoed by President Clinton in the 106th Congress. Elimination of the death tax remains a top priority for AIADA in 2001, and the association is hopeful the issue will be addressed early. "We strongly encourage President-elect Bush to move aggressively for an end to the death tax," said AIADA vice president of government relations Scott Lane. House Speaker Dennis Hastert and Senate Majority Leader Trent Lott both urged Bush to consider changing his strategy from a large tax bill to a series of smaller bills. Lott pointed specifically to the elimination of the estate tax and the marriage penalty as a way to start the process, noting the bipartisan support for those issues.

106th Congress Adjourns, Preparations for 107th Underway

The House and Senate officially adjourned the 106th Congress on Dec. 15, after scrambling to finish a catch-all funding package in a lame duck session that provides a record $634 billion for all government departments and agencies through next September. Things won't be quiet on Capitol Hill for long. The new members of the 107th Congress will be sworn in on Jan. 3, 2001. As Congress gears up for the coming year, yet to come are announcements of who will chair key committees such as House Ways and Means and Senate Finance, which influence issues of concern to auto dealers. Although Republicans control the House, Senate and White House for the first time in almost 50 years, the narrow margins of victory will require bipartisan political cooperation to get anything done. With so many new members of Congress, it will also take time to bring everyone up to speed on the issues. AIADA's grassroots force gives the association an early advantage. "This is an important time to begin educating new members of Congress," said Lane. "Through the dealers in our Legislative Involvement Program, we will be reaching out early and often to educate Congress on the issues that impact automobile dealerships." For more information or to get involved, call 1-800-GO-AIADA.

An organization committed to free trade and an open and competitive automotive market in the United States, AIADA supports permanent normal trade relations with China and fast-track negotiating authority. The association also serves as a watchdog in Washington on automotive trade issues to ensure that trade disputes do not negatively impact its members, the 10,000 American retailers of international nameplate automobiles.

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DECEMBER BRIEFS

U.S.-JAPAN AUTO TRADE

No new agreement has yet been reached to replace the 1995 U.S.-Japan Auto Accord, which was forged in the midst of threatened 100 trade tariffs on Japanese luxury cars. Talks between the two sides continued this week in San Francisco, but insiders indicate it is unlikely that a deal will be struck before the agreement expires on Dec. 31.

Pointing to the wave of mergers and acquisitions in the automotive industry, Japanese officials said that no new agreement is necessary. "We see no need for an extension," said one official. "Most Japanese automotive companies are now partially owned by foreign companies." Despite Tokyo's lack of interest in a new agreement, the U.S. is seeking to forge a renewed deal that would include measurable targets for parts purchases.

U.S.-KOREA AUTO TRADE

Korean auto trade continues to be a subject of debate as lobbyists from the Big Three- backed Trade Policy Council and members of the European automobile industry press for increased access to the Korean auto market. AIADA continues to monitor this issue for any potential impact on Hyundai, Kia and Daewoo dealers in the U.S.

2001 MEMBERSHIP DRIVE/

AIADA's 2001 membership drive continues! Depending on your dealership, you may wish to pay your 2001 dues before the end of the year. Send in your dues today!

LUXURY TAX TO FALL TO 4% ON JAN. 1, 2001

As of January 1, 2001 the luxury tax rate will be four percent on new vehicles sold with a transaction price above $38,000. Example: If the transaction price is $45,000, $7,000 is subject to the four percent tax, for a total of $280 due in luxury tax. Trucks, vans or SUVs with a loaded gross vehicle weight of more than 6,000 lbs. are exempt from the luxury tax, for example: the BMW X5, Toyota Sequoia and Suburban are exempt. The new Acura MDX is subject to the tax.

The drop in the tax rate is part of the luxury tax phase out signed into law on Aug. 20, 1996 after six years of intense AIADA lobbying. The tax rate will drop one percent a year until it expires on Jan.1, 2003.

REGISTER TODAY FOR AIADA's ANNUAL MEETING ON FEB. 5

AIADA will hold its 31st Annual Membership Meeting and Luncheon on Monday, Feb. 5 at the Las Vegas Hilton, in conjunction with the NADA Convention. AIADA's 2000 Chairman Barbara Vidmar of Pueblo, Colo., will report on the association's accomplishments over the past year and Richard Kull, a multi-line dealer from Marlton, N.J., will be installed as AIADA's 2001 Chairman. Several awards will be presented including the first-ever Auto E- Tailer of the Year awards.

The event begins with a reception at 11:15 am followed by the luncheon at 12:00 noon in the Hilton Ballroom. Tickets are $40 in advance and $45 at the door.

An organization committed to free trade and an open and competitive automotive market in the United States, AIADA supports permanent normal trade relations with China and fast-track negotiating authority. The association also serves as a watchdog in Washington on automotive trade issues to ensure that trade disputes do not negatively impact its members, the 10,000 American retailers of international nameplate automobiles.

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