US retailers are urging the Senate to pass a controversial overhaul of the US tax code that they say would slash corporate rates and would ultimately boost the economy, create jobs, and bring back investment.
The National Retail Federation (NRF) has made the call ahead of a vote this week. The tax reform legislation was approved by House Republicans two weeks ago but now needs full Senate approval for it to be passed.
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US retailers buoyed by progress on tax reform
The measure will 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. The NRF also says it would bring investment back to the US that has gone overseas, while also helping small businesses and consumers.
“NRF believes that tax reform will boost the economy, helping small and large retailers alike along with their customers,” NRF senior vice president for government relations David French said.
“This legislation represents a once-in-a-generation opportunity to address major flaws in US tax law that are driving investment out of the country. Reducing the corporate rate will help attract investment to the United States, which will create jobs, boost wages and increase consumer spending.”
French’s comments came in a letter sent to members of the Senate, who are expected to vote today (30 November) on its version of the Tax Cuts and Jobs Act of 2017. The House passed its bill last week. French said NRF will count Senate action on tax reform as a key vote in its annual ranking of lawmakers on issues important to the retail industry.
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By GlobalDataHe added the US corporate tax rate of 35% is the highest in the industrialised world and has caused some US companies to move investment out of the country while discouraging foreign companies from investing there. Both the Senate and House versions of tax reform legislation would lower the rate to 20% while also providing tax relief for small businesses and middle-class taxpayers.
Manwhile, NRF believes lowering taxes for employers – including small businesses as well as larger companies – would free up resources businesses could use to create more jobs.
President and CEO Matthew Shay praised the Senate bill’s small business provisions at a news conference with Majority Leader Mitch McConnell, R-Ky., on Tuesday, noting that 95% of retailers operate just one location while 98% have 50 or fewer employees.
The House bill would set a 25% tax rate for small business “pass throughs” while the Senate bill would give pass throughs a 17.4% deduction.
