US retailers have welcomed the approval by House Republicans of a controversial overhaul of the US tax code that slashes corporate rates.
The Senate Finance Committee approved the tax reform legislation yesterday (16 November) after US President Donald Trump made a visit to Congress to rally lawmakers around the tax overhaul plan. The measure would cut the federal corporate tax rate to 20% from the current 35%, reduce taxes for small business pass throughs, and lower taxes for middle-class workers
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“With this pro-growth measure now approved by committee, we urge senators to spend the Thanksgiving break building consensus on how to pass tax reform and to set aside any differences that might keep this vitally important goal from becoming reality,” says Matthew Shay, president and CEO at the National Retail Federation (NRF). “Tax reform is the key to increased prosperity that small businesses, large employers and middle-class workers have all been waiting for for more than a generation. This is about jobs, wages and America’s future.”
The Finance Committee approved the Senate’s version of the tax reform, voting just hours after the full House approved the Tax Cuts and Jobs Act of 2017 on a 227-205 vote. A vote by the full Senate is expected after Thanksgiving (23 November). Both the House and Senate bills would provide the first comprehensive rewrite of the US tax code since 1986.
Last month, Shay told Trump during a White House meeting with trade association CEOs that retailers strongly support tax reform as a way to create jobs and boost the nation’s economy.
“The NRF has led the retail industry’s fight for tax reform for years, calling on Congress to eliminate tax breaks that benefit only some industries and to use the revenue saved to lower rates for all companies, including small businesses,” it says.
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By GlobalDataA recent analysis by the group found that reducing the corporate tax rate to 20% could result in the creation of between 500,000 and 1.5m new jobs throughout the economy.
However, the legislation faces significant challenges in the Senate, which is working to build support for its own version of the bill. The plan also faces opposition from the Democrats, who say it is a give-away to the wealthiest Americans.
Nonetheless, the White House celebrated yesterday’s vote as a “big step.” In a statement afterwards, it said: “A simple, fair, and competitive tax code will be rocket fuel for our economy, and it’s within our reach. Now is the time to deliver.”
