NRF opposes 20% border tax proposal
The National Retail Federation (NRF) is urging Congress to oppose the border tax that would drive up the cost of goods imported because it will prohibitively increase consumer prices.
The House is in the process of holding sessions hearing the effects of tax changes on individuals and small businesses. The "Better Way" tax reform bill proposes a 20% increase on goods imported into the country. To adjust for the 20% tax, NRF members would have to raise prices 15% to break even. NRF estimates this would cost the average family $1,700 more each year.
NRF Senior Vice President David French wrote in a letter to the House Ways and Means Committee that the effect of the border tax would "shift the tax burden to individuals and families through the imposition of a consumption tax."
The border tax idea was presented by Republican House Speaker Paul Ryan and Republican Ways and Means Committee Chairman Kevin Brady.
“Hardest hit would be low and middle-income consumers, especially those on a fixed income,” French wrote.
Instead of imposing a new border tax, French said the NRF encourages Congress to reevaluate the existing income tax structure. Specifically, NRF is in favor of eliminating tax deductions and exemptions that benefit a handful of industries and using the revenue saved to help reduce tax rates for all businesses.
According to the NRF, the US has one of the highest corporate income tax rates in the world. Most retailers are taxed close to the full rate of 35%. Unlike other industries which receive niche tax breaks, retail usually does not qualify for those exemptions.
NRF actively lobbies for tax reform instead of pushing the tax burden to the consumer. 42 million Americans, or one in four, work in retail. Retail contributes $2.6 trillion dollars annually to our country's GDP. To that end, NRF frequently lobbies not only for its member retailers but also for the consumer-facing side of retail as it affects the economy.
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