It costs General Motors an average of $1,500 per unit built to pay health and retirement benefits. Cars imported from Europe and Japan do not have to factor in any costs for such benefits.
Consider: A value-added tax should be levied on all cars sold in the United States. Any manufacturer that must pay medical and retirement benefits should receive a rebate of at least 100 percent on all items produced in the United States. Parts not manufactured in the United States would not be eligible for the rebate.
A car assembled outside the United States would be eligible for a rebate only on U.S.-made parts and components. Vehicles assembled in the United States by foreign makers would be eligible for a rebate, as would their U.S.-made parts and components.
The proceeds from the value-added tax could be used to fund Social Security.
Cars exported to other countries typically are assessed a value-added tax or an import duty, so this would put U.S. automakers and parts makers on a more level playing field with others and help solve the problem of the underfunding of Social Security.