January 16, 2012
NRF Addresses Open Letter to President Obama
In a letter sent to President Obama last week, NRF president and CEO Matthew Shay and NRF chairman Terry Lundgren urged the president to advocate for policies that will help the retail industry grow and create jobs.
The letter asked President Obama to include three key issues in his speech to Congress:
- Sales tax fairness legislation "that would ease the burden on Main Street retailers who create local jobs but are under increasing pressure from online competitors" that don’t have to collect tax on most sales.
- Corporate tax reform that would eliminate deductions and credits "enjoyed by a few industries in return for lowering tax rates for all businesses," enabling retailers to lower prices and increase jobs throughout the supply chain from the increased sales that would result.
- Free and open trade initiatives that would build upon recent Free Trade Agreements and remove protectionist restrictions in future FTAs.
The letter also asked President Obama to address neglected transportation infrastructure that slows down supply chains; credit card swipe fees that drive up prices for consumers; and mandates under the health care reform law they believe will threaten jobs. It also asked the Administration to speed up the visa process to make it easier for foreign visitors to come to the United States to shop.
"America’s retailers want to continue growing our economy, but to do that we need Washington to embrace common-sense economic policy, remove barriers to job creation, and do so without asking for more tax dollars to foot the bill," Messrs. Shay and Lundgren wrote.
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Discussion Questions
Of the legislation issues mentioned in NRF’s letter, which do you think are most important for the retail community to lobby for? Which are the least important and why?
Poll
The only one of these initiatives that has any value to the U.S. over the long haul is repairing our infrastructure. The rest are tunnel-vision and short term patches that further exacerbate our nation’s problems.
I think the “sales tax fairness” issue is the most pressing. Retailers who are mandated to charge sales taxes for in-store or e-commerce sales are fighting with one hand tied behind their backs. And — while nobody likes to pay taxes on anything — the loss of local sales tax revenue from some e-commerce sites is creating a growing hole in state treasuries. There ought to be consistent, fair treatment on this question.
Corporate tax reform and relief from Obamacare obligations and restrictions place the NRF right in the center of the business community and its concerns about the anti-business actions emanating from Washington in general and the White House in particular The sales tax issues are particularly applicable to the retail industry, even though the NRF has brick-and-mortar members, ecommerce members and multi-channel members.
I have talked to CEOs from “pure play” online retailers and they generally feel that sales tax impositions are inevitable but, before that happens, they are happy to reap the benefits and let Amazon carry the fight against the taxes. Some consumers may shop online because of the tax break, but the major question is, once the taxes are imposed, will they go back to shopping in physical stores? Retailers really have to get their differentiation strategies in order in preparation for the taxes. This is particularly true of e-commerce merchants who exploit the absence of taxes as their primary marketing tool.
As for import duties and obstacles to foreign-made goods to enter the U.S., this probably will never be resolved as long as it is framed as an argument over affordable goods for consumers vs. jobs for Americans. Until the partisans realize the country can have both with just a little compromising, this will be a political “hot potato.”
Makes for great press, but requiring customers to pay sales tax for online purchases is not going to significantly impact the shift of sales from the internet back to brick and mortar retailers. If it were truly the differentiator between the two methods of making a purchase, retailers would simply offer an equivalent discount.
Purchasing on the internet means having access to all the items in the category, having access to information about all the products, other customers’ feedback on the items, etc. Brick and mortar also has a unique set of advantages like being able to physically touch the product and offering the instant gratification of taking the item home. The issue for B&M retailers is that customers increasingly find the internet’s set of advantages more attractive, not the difference in price due to the sales tax.
The issues and demands of the NRF appear to be very reasonable.
NRF’s letter highlights relevant issues. However, there is no magic wand that can fulfill these wishes with one wave. I believe more recommendations are required on the part of the NRF to facilitate overcoming local and national barriers. If the NRF shows how their goals can be achieved, they have a better chance of success.
The biggest impediment to job creation in retail or any other business in our economy is health care reform and the corporate business tax structure.
Cost have already begun to skyrocket in health care as a result of all of the unknowns and mandates in the legislation pending in the Supreme Court. Retail and every other business is on hold until this is resolved.
In the same way, the corporate tax uncertainty is a major hindrance.
If the current legislation continues to proceed forward to complete implementation there will be a jobs collapse that is unimaginable.
The least important is sales tax fairness. Consumers make decisions on the basis of purchase price, need, experience, etc. They give very little consideration whatsoever to sales tax via online v. bricks. It’s a non-starter.
The internet will help a little, but as stated above, there are many issues facing business today that need addressing. I am not optimistic about much change coming, as this current administration really does not value successful people; rather, it demonizes them. Unless we get a true business person in the oval office, and the Senate, we are doomed for more regulation, a zero energy policy, and more redistribution of our hard earned money.
When is the last time any politician actually listened to the business folks?
I think corporate tax reform is needed, such as eliminating corporate taxes altogether. We should be encouraging the President to create policies that promote profit and not jobs. Jobs will come on their own. The comment about jobs is just there to make it sound more compassionate but makes the letter sound disingenuous. We know what we want, the president knows what we want, and the public knows what we want — more money.
Given the current political climate, the President is not likely to consider any issues that are not congruent with solidifying his base of support. That translates to it being highly unlikely that any reforms or easing of the most pressing of issues affecting business, new federal involvement in healthcare, will happen in 2012.
Other issues that lower or limit taxes are also suspect for consideration, although transportation infrastructure repair could be proposed, but unless it is overtly funded by cuts in other Federal programs or services, it is not likely to be passed by the Republican controlled House.
In summary, nice letter … very little hope for any resulting action.
I see: the NRF wants lower taxes and less government involvement, except things like bank fees and “infrastructure” (where they want MORE involvement). OK.
The sales tax argument I find a bit confusing. While I have nothing against equalizing on- and off-line rates (since the former is essentially now zero), aren’t the people who now benefit from this (i.e. online sellers) also retailers? And doesn’t the fact that they employ people mean they have already created jobs? Maybe the NRF should lobby the various state legislatures to abolish sales taxes altogether. Once that is accomplished, all we need is for a call to abolish the income tax, and then (together w/ David’s “eliminat[ing] corporate taxes altogether”) we’ll have a Trifecta!
Freeing retailers from excess regulation, opening free trade channels, bolstering corporate tax consistency, repeal of the health care mandates, and attention to infrastructure — all represent the economic and political focus around which to rally.
The debit card swipe fee was covered by the Dodd-Frank Bill. However, now that retailers will begin to experience cost-savings from this avenue, don’t hold you breath that those fees will be passed on to consumers.
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The only one of these initiatives that has any value to the U.S. over the long haul is repairing our infrastructure. The rest are tunnel-vision and short term patches that further exacerbate our nation’s problems.
I think the “sales tax fairness” issue is the most pressing. Retailers who are mandated to charge sales taxes for in-store or e-commerce sales are fighting with one hand tied behind their backs. And — while nobody likes to pay taxes on anything — the loss of local sales tax revenue from some e-commerce sites is creating a growing hole in state treasuries. There ought to be consistent, fair treatment on this question.
Corporate tax reform and relief from Obamacare obligations and restrictions place the NRF right in the center of the business community and its concerns about the anti-business actions emanating from Washington in general and the White House in particular The sales tax issues are particularly applicable to the retail industry, even though the NRF has brick-and-mortar members, ecommerce members and multi-channel members.
I have talked to CEOs from “pure play” online retailers and they generally feel that sales tax impositions are inevitable but, before that happens, they are happy to reap the benefits and let Amazon carry the fight against the taxes. Some consumers may shop online because of the tax break, but the major question is, once the taxes are imposed, will they go back to shopping in physical stores? Retailers really have to get their differentiation strategies in order in preparation for the taxes. This is particularly true of e-commerce merchants who exploit the absence of taxes as their primary marketing tool.
As for import duties and obstacles to foreign-made goods to enter the U.S., this probably will never be resolved as long as it is framed as an argument over affordable goods for consumers vs. jobs for Americans. Until the partisans realize the country can have both with just a little compromising, this will be a political “hot potato.”
Makes for great press, but requiring customers to pay sales tax for online purchases is not going to significantly impact the shift of sales from the internet back to brick and mortar retailers. If it were truly the differentiator between the two methods of making a purchase, retailers would simply offer an equivalent discount.
Purchasing on the internet means having access to all the items in the category, having access to information about all the products, other customers’ feedback on the items, etc. Brick and mortar also has a unique set of advantages like being able to physically touch the product and offering the instant gratification of taking the item home. The issue for B&M retailers is that customers increasingly find the internet’s set of advantages more attractive, not the difference in price due to the sales tax.
The issues and demands of the NRF appear to be very reasonable.
NRF’s letter highlights relevant issues. However, there is no magic wand that can fulfill these wishes with one wave. I believe more recommendations are required on the part of the NRF to facilitate overcoming local and national barriers. If the NRF shows how their goals can be achieved, they have a better chance of success.
The biggest impediment to job creation in retail or any other business in our economy is health care reform and the corporate business tax structure.
Cost have already begun to skyrocket in health care as a result of all of the unknowns and mandates in the legislation pending in the Supreme Court. Retail and every other business is on hold until this is resolved.
In the same way, the corporate tax uncertainty is a major hindrance.
If the current legislation continues to proceed forward to complete implementation there will be a jobs collapse that is unimaginable.
The least important is sales tax fairness. Consumers make decisions on the basis of purchase price, need, experience, etc. They give very little consideration whatsoever to sales tax via online v. bricks. It’s a non-starter.
The internet will help a little, but as stated above, there are many issues facing business today that need addressing. I am not optimistic about much change coming, as this current administration really does not value successful people; rather, it demonizes them. Unless we get a true business person in the oval office, and the Senate, we are doomed for more regulation, a zero energy policy, and more redistribution of our hard earned money.
When is the last time any politician actually listened to the business folks?
I think corporate tax reform is needed, such as eliminating corporate taxes altogether. We should be encouraging the President to create policies that promote profit and not jobs. Jobs will come on their own. The comment about jobs is just there to make it sound more compassionate but makes the letter sound disingenuous. We know what we want, the president knows what we want, and the public knows what we want — more money.
Given the current political climate, the President is not likely to consider any issues that are not congruent with solidifying his base of support. That translates to it being highly unlikely that any reforms or easing of the most pressing of issues affecting business, new federal involvement in healthcare, will happen in 2012.
Other issues that lower or limit taxes are also suspect for consideration, although transportation infrastructure repair could be proposed, but unless it is overtly funded by cuts in other Federal programs or services, it is not likely to be passed by the Republican controlled House.
In summary, nice letter … very little hope for any resulting action.
I see: the NRF wants lower taxes and less government involvement, except things like bank fees and “infrastructure” (where they want MORE involvement). OK.
The sales tax argument I find a bit confusing. While I have nothing against equalizing on- and off-line rates (since the former is essentially now zero), aren’t the people who now benefit from this (i.e. online sellers) also retailers? And doesn’t the fact that they employ people mean they have already created jobs? Maybe the NRF should lobby the various state legislatures to abolish sales taxes altogether. Once that is accomplished, all we need is for a call to abolish the income tax, and then (together w/ David’s “eliminat[ing] corporate taxes altogether”) we’ll have a Trifecta!
Freeing retailers from excess regulation, opening free trade channels, bolstering corporate tax consistency, repeal of the health care mandates, and attention to infrastructure — all represent the economic and political focus around which to rally.
The debit card swipe fee was covered by the Dodd-Frank Bill. However, now that retailers will begin to experience cost-savings from this avenue, don’t hold you breath that those fees will be passed on to consumers.