Consumption Tax Makes Strange Bedfellows
By George Anderson
It would be factually wrong to say that all retail executives are politically conservative and Republican (Jim Sinegal of Costco coming to mind as an obvious exception).
It’s probably not too far a field, however, to suggest that most would fall to right of center on the political spectrum.
That said, the executives running retail businesses in the U.S. and liberal Democrats find themselves in a virtual lockstep in their opposition to a proposal by a member of the House, Virginia Republican John Linder, which would impose a national Value Added or consumption tax on sales.
The National Retail Federation (NRF) filed its opposition to such a tax with the President’s Advisory Panel on Federal Tax Reform.
Mirroring liberal groups’ objections to a consumption tax, a release from the NRF said this form of taxation is “inherently regressive because low-income families spend virtually their entire incomes while wealthier families have larger percentages of unspent income that would go untaxed.”
The NRF cited research it did back in 2000, concluding “a national sales tax would bring a three-year decline in the economy, a four-year decline in employment and an eight-year decline in consumer spending.”
The group expressed its deepest concern that Congress would pass a consumption tax while maintaining much of the current system.
Moderator’s Comment: Would replacing the current national income tax with a value added or consumption tax system have a beneficial or negative impact
on retailing and the U.S. economy? –
George Anderson – Moderator