Retailers Don't Believe Stimulus Bill Is Enough to Work
A stimulus bill may be on its way to helping the United States dig out of its economic mess, but the National Retail Federation would like to see more.
In a letter sent to Congress, the NRF said it approves of the bill, but it doesn’t go far enough to get consumers into the stores.
Instead, the NRF would like to see national sales-tax holidays held in March, July and October. Each sales holiday would last 10 days, including two weekends.
“The massive measure still fails to provide the direct and targeted tax relief needed to stimulate consumer spending,” said Steve Pfister, the NRF’s senior vice president for government relations. “With consumer spending representing two-thirds of GDP [gross domestic product] and consumer confidence at the lowest level since records have been kept, it is difficult, if not impossible, to foresee an improvement to overall economic growth until consumers regain confidence and resume spending.”
The NRF calculates that the tax holidays could save consumers $20 billion, based on the $236 billion in sales tax collected every year.
The federal government would then reimburse the 45 states that have sales taxes for the lost revenue. For the five states that don’t have sales taxes—Alaska, Delaware, Montana, New Hampshire and Oregon—the federal government would give them comparable reimbursements based on population.
Last week, the NRF forecast that retail sales will drop 2.5 percent during the first half of 2009 and decline 0.5 percent this year. —Deborah Belgum
