WASHINGTON--(BUSINESS WIRE)--The National Retail Federation today welcomed President Obama’s proposal for business tax reform as a positive step toward fundamental reform of the U.S. tax code, and pledged to work with the White House and Congress to win passage of legislation that would significantly lower rates in order to help retailers and other businesses create jobs.
“Tax reform is a monumental undertaking that can only be achieved with the backing of the President,” NRF President and CEO Matthew Shay said. “President Obama has put the power of his office behind this goal and made it clear we can no longer tolerate having American businesses saddled with the second-highest tax rates in the world. Lower taxes will make U.S. businesses more competitive at home and abroad, and will help create the jobs out-of-work Americans are looking to fill.”
“The President’s proposal is a significant step forward, and we hope the Administration will work closely with those in Congress who have proposed going even further,” Shay said. “Tax reform is a once-in-a-generation opportunity and we need to get it right. Reform needs to address small businesses as well as corporations, and needs to be fair to all industries rather than favoring one over another.”
The White House announced today that Obama will seek to reduce the current 35 percent top corporate tax rate to 28 percent in return for “broadening the base” by eliminating dozens of current tax credits and deductions. He also pledged to provide adequate transition periods to allow businesses to adjust to the new tax rules. But he also called for special benefits for manufacturing that would reduce that industry’s effective rate to 25 percent.
NRF has supported corporate tax reform that would eliminate most if not all credits and deductions rather than creating new ones, and favors an approach put forward by House Ways and Means Committee Chairman Dave Camp, R-Mich., to lower the top rate to 25 percent for both corporations and individuals. Many retailers are small businesses that pay their taxes utilizing individual tax rates.
NRF has led the retail industry’s push for corporate tax reform, and is a member of the RATE Coalition, a broad-based industry group dedicated to corporate tax reform that eliminates corporate tax expenditures in favor of a significantly lower rate. Retailers benefit from few of the tax provisions enjoyed by other industries, and consequently pay among the highest effective rates of any U.S. industry, often at or close to the full 35 percent statutory rate. NRF has argued before Congress that reform would make the tax code more economically efficient and make it easier for companies to make decisions based on business reasons rather than tax implications. Retailers would also likely see savings that could be passed along in lower prices, thereby increasing consumer demand and increasing jobs throughout the supply chain.
As the world’s largest retail trade association and the voice of retail worldwide, NRF represents retailers of all types and sizes, including chain restaurants and industry partners, from the United States and more than 45 countries abroad. Retailers operate more than 3.6 million U.S. establishments that support one in four U.S. jobs – 42 million working Americans. Contributing $2.5 trillion to annual GDP, retail is a daily barometer for the nation’s economy. NRF’s Retail Means Jobs campaign emphasizes the economic importance of retail and encourages policymakers to support a Jobs, Innovation and Consumer Value Agenda aimed at boosting economic growth and job creation. www.nrf.com