It’s the first day of school. First, your oldest boards the bus sporting her new smartphone, covered by a case that reflects her very unique style. Next, your middle daughter skips onto the bus showing off her brand new outfit, an outfit completed by her pride and joy—her new purse. And finally, your youngest bounds on to the bus and goes out of his way to make sure everyone sees his brand new backpack, which happens to have his favorite character in the world on it. You are brimming with mixed emotions, sad that they are another year older and that another summer has passed, but proud of what your children have become…and that they are finally off to school.
So what is wrong with this picture?
The wallet in your bag or pocket is a lot lighter than it should be. Why? Because you paid a huge, hidden, and unnecessary tax on that cool smartphone case (20 percent), that pretty purse (17.6%), and that awesome backpack (17.6%). You even paid a huge tax for that very wallet (20 percent) that’s a lot lighter because of these taxes.
Why are you paying these hidden taxes? Because virtually all cases, handbags, backpacks and other travel goods (like luggage) sold in the United States are imported, and every import must pay an import tax.
And even though virtually all of these travel goods are no longer made in the United States and these taxes protect no one, you must still pay a very high—and hidden—price for the privilege of equipping your children with these back to school essentials.
In fact, American families paid, at retail, an estimated $4 billion in huge, hidden and unnecessary taxes last year for their children’s backpacks, cases, purses and other travel goods.
But we have the opportunity now to make a dent in this oversized back to school bill: the proposed Trans-Pacific Partnership (TPP) free trade agreement.
If approved, TPP would make U.S. imports of backpacks, purses, cases and other travel goods from Vietnam, the second largest U.S. travel goods supplier, duty-free immediately upon implementation. TPP would also open up other fast-growing markets for U.S.-branded travel goods—from Japan, Australia, and New Zealand to Singapore, Mexico and Malaysia.
That means you could save a bundle on kids’ back to school gear, make your kids happy and help the 100,000 U.S. workers that make up the U.S. travel goods industry have a much better school year.
But, that’s only if Congress approves the TPP agreement.
Your member of Congress needs to hear from you, as concerned parents, on why they need to approve the TPP agreement now, because eliminating hidden and unnecessary taxes on back to school is a lesson all of us can get behind.
By Michele Marini Pittenger, president and CEO, Travel Goods Association (TGA)
This piece is part of the outreach by footwear, apparel, travel goods, and retail industry organizations to raise awareness regarding the positive economic potential of the TPP trade agreement.