Top trade groups laud passage of tax reform as victory for America
The nation’s leading retail and consumer goods trade organizations quickly praised passage of tax reform legislation Wednesday afternoon as a holiday gift for retailers and Americans.
The National Retail Federation, the Retail Industry Leaders Association, The Food Marketing Institute, the Grocery Manufacturers Association and the National Grocers Association heaped praise on lawmakers and President Donald Trump for passage of tax reformer legislation they described as comprehensive, overdue and historic.
“Passage of tax reform is a major victory for retailers who currently pay the highest tax rate of any business sector, and for the millions of consumers they serve every single day,” said NRF President and CEO Matt Shay. “Our priorities were clear: reform must jumpstart the economy, encourage companies to invest here in the United States, increase wages and expand opportunities for employees, and protect our small business community, of which the vast majority are retailers.”
That’s exactly what the reform legislation achieves, according to NRF, and most important, “this historic tax reform will put more money in the pockets of consumers – the best Christmas gift middle-class Americans could ask for this holiday season,” Shay said.
RILA President Sandy Kennedy shared Shay’s sentiments, noting that for years that tax reform has been one of its top legislative priorities.
“Retailers have long advocated for comprehensive tax reform that eases the tax burden that American consumers and businesses face. Today, with the final passage of comprehensive tax reform and the President’s signature imminent, the goal of a fairer, more globally competitive tax code that provides middle income taxpayers with critical relief will soon be realized,” Kennedy said. “We applaud the President and Congress for their commitment to reforming the tax code and we look forward to working with the Administration on the implementation of these critical reforms.”
Retailers have traditionally paid one of the highest effective corporate tax rates, Kennedy noted. As a result, a fairer and more competitive tax code will give retailers the ability to modernize stores, invest in their workforce and continue to transform the shopping experience for consumers.
“The fierce competition of today's retail environment means the ultimate winner in tax reform will be our customers,” Kennedy said.
Nowhere is competition fiercer than in food retailing so passage of the reform legislation drew praise from The Food Marketing Institute.
“Food wholesale and retail are low margin, high tax industries that have been waiting for just this type of relief to spur investment and create jobs,” said Jenifer Hatcher, FMI's Chief Public Policy Officer and Senior Vice President for Government Relations. “FMI and its members are anxious to see this legislation implemented as quickly as possible.”
Hatcher noted that the legislation dramatically lowers the corporate tax rate and increases expensing levels, which should improve technology and job growth while preserving industry priorities like Last-In, First-Out (LIFO accounting) and the Work Opportunity Tax Credit and avoiding a punitive Border Adjustment Tax (BAT).
“Consumers will also benefit from having more money in their pockets, thanks to a doubling of the standard deduction and lower tax rates,” Hatcher said.
National Grocers Association President and CEO Peter Larkin characterized the legislation as a one-in-a-generation type of reform that would benefit independent retailers represented by NGA.
“For years, independent supermarket operators have tried to keep pace with a rapidly-changing marketplace while operating in an industry with high effective tax rates on just 1% to 2% profit margins. This new weight lifted off their shoulders will allow stores to invest more in their companies, employees, and communities,” Larkin said. “We’re pleased this historic bill lowers rates for both C-corporations and pass-through businesses, and retains the many important policies that will significantly help entrepreneurs hire additional staff, expand offerings, and upgrade their stores.
The tax reform is also expected to benefit manufacturers, with Pam Bailey, President and CEO of the Grocery Manufacturers Association, calling it the most significant piece of tax reform legislation in 30 years.
“It will help spur job creation within the grocery manufacturing industry and provide tax relief for working families,” Bailey said. “The food, beverage, and consumer products industry has long urged action to fix our broken tax system, which must work in favor of both consumers and manufacturers. We applaud Congress for its hard work to pass this bill to support American jobs and American families.