The National Retail Federation has welcomed the move “as a positive step forward”

The National Retail Federation has welcomed the move “as a positive step forward”

The US retail industry has welcomed the Trump Administration's new framework for tax reform that could see corporate tax rates cut to their lowest in nearly 80 years if passed.

President Donald Trump yesterday (27 September) unveiled an ambitious tax plan dubbed a "once-in-a generation" opportunity to overhaul America's tax code that will give US workers and businesses a level playing field.

The framework calls for a lowering of the corporate tax rate from 35% to 20%, and a lowering of the rate for so-called pass-through businesses to 25% instead of taxing them at an individual rate.

There will also be an elimination of some business deductions and industry-specific incentives to ship jobs, capital, and tax revenue overseas. A one-time repatriation tax is proposed that will see all overseas assets from US-owned companies considered repatriated and taxed at a one-time lower rate, designed to bring corporate profits back from overseas.

"We have a once-in-a generation opportunity to give American workers and businesses the level playing field they deserve and make us competitive once again on the world stage," says Gary Cohn, director of the National Economic Council. "The Administration and Congress have worked together to develop this unified framework for tax reform, which will grow our economy, create jobs, and provide relief for working families. This framework will deliver on the President's promise to end the rigged system that has kept our workers and businesses down for too long."

The National Retail Federation (NRF) welcomed the move "as a positive step forward" to achieving the kind of comprehensive tax reform that is needed to keep America's economy competitive in the global environment.

"This plan would provide much-needed relief for corporations, small businesses and middle-class individuals alike, and would help draw foreign capital and investment to the United States," says NRF president and CEO Matthew Shay. "This is the framework we need to unlock job creation and economic growth. As an industry that pays at or close to the full 35% federal corporate tax rate, our focus is on eliminating tax breaks that benefit only a few industries and using the money saved to lower rates for all businesses."

Shay says that if the rate is low enough, it will benefit all sectors of the economy equally.

"Economic studies show that this type of reform will increase investment in the United States, increase wages and help our customers. That is our number one goal, and it has been for years. Retailers are affected by both the business and individual sides of tax reform. The relief provided to corporations and small business 'pass-throughs' in this plan would help ease retailers' tax burden and free up capital for investment, job growth, higher wages and innovation.

"But just as importantly, the middle-class relief provided here means consumers would have more money in their pockets when they come into our stores, and that would mean a boost for the consumer spending that drives both retail sales and two-thirds of our nation's economy."