Small retailers say border tax proposal would cost jobs
July 13, 2017,
WASHINGTON — The National Retail Federation today urged the House tax-writing committee to consider small retailers and their employees when reforming the nation’s tax code.
“Small retailers are probably the business group that is hardest hit by the potential impact of the BAT,” NRF Senior Vice President for Government Relations David French said. “They do not have the economies of scale to be able to reduce the higher costs of their merchandise with the BAT imposed and are most likely to lose sales to lower-priced competition.”
French said the 20% BAT that would be created under the “Better Way” tax reform plan proposed by House Speaker Paul Ryan, R-Wis., and Ways and Means Committee Chairman Kevin Brady, R-Texas, would effectively move the U.S. toward a consumption tax structure rather than the current income tax structure.
“Our small retail members are very concerned about tax reform efforts that might shift the burden of taxation to consumption,” he said. “Increased costs to the consumer will cause sales to decline and result in a contraction in their businesses.”
Instead, he said, Congress should reject the BAT proposal and focus on reform of the existing income tax system.
A recent NRF survey of small retailers found that three out of five expect a negative impact on their businesses if the BAT is enacted, and 18% said their businesses could fail, estimating that more than 200,000 jobs could be lost to layoffs and wages could be reduced by close to $500 million because of reduced hours for employees. Small businesses make up 98% of the retail industry and provide 40% of its jobs.
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