Tag Archives: tax reform

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NRF President and CEO Matthew Shay: retailers would work “tirelessly” to achieve tax reform without shifting the burden to consumers

WASHINGTON, 2017-Jun-22 — /EPR Retail News/ — National Retail Federation President and CEO Matthew Shay said in an interview today (June 21, 2017) on Fox Business Network’s Varney & Co. that retailers would work “tirelessly” to achieve tax reform that lowers rates without shifting the burden to consumers.

Regarding House Speaker Paul Ryan’s speech on tax reform the day before, Shay said, “The Speaker made very clear that there is more than one way to get this done….I think that is encouraging. That is a sign that he and Chairman Brady and others are being responsive to the concerns they have heard and the recognition the politics of this, it just doesn’t make sense to do tax reform by imposing a $1700 tax on American families.”

To watch the full interview, click here.

The United States has one of the highest corporate tax rates in the world and NRF has led the retail industry in advocating for comprehensive tax reform that would broaden the tax base and lower the rate. Retail benefits from few of the tax breaks that lower tax bills for other industries, and most retail companies pay at or close to the full 35 percent rate.

TRANSCRIPT
Fox Business Network
Varney & Co. – Matt Shay Interview
June 21, 2017
http://video.foxbusiness.com/v/5478892341001/?#sp=show-clips

STUART VARNEY: House Speaker Paul Ryan outlined his tax reform plan yesterday. He barely mentioned the so-called border adjustment tax. National Retail Federation CEO Matt Shay is here with us now. Alright, Matt, take a victory lap because you killed it. You killed the border tax.

NRF PRESIDENT AND CEO MATTHEW SHAY: Nice to be with you, Stuart. Glad to be here today. I think that the speech Speaker Ryan gave yesterday and the outline that he provided to that audience was something that would resonate very well with our members, would be very popular with the retail industry. He said a lot of things with which we agree and that makes the point, that we have been in agreement with the Speaker on the need for tax reform for a long time and we have one disagreement over one element and the fact he didn’t mention that element yesterday is encouraging to all of us.

VARNEY: Your disagreement is purely about the border adjustment tax and that is the way of paying for this tax reform. If you take away the border adjustment tax would you be okay with substituting a consumption tax like a gas tax?

SHAY: I think a consumption tax and a gas tax would be received very differently depending on which industries you are talking about because they will have different impacts. But I think the point here is that the Speaker made very clear that there is more than one way to get this done and the fact that he acknowledged there’s a way to do tax reform, and said, for reference, we have a proposal here in the House but there are many ways to get this done, I think that is encouraging. That is a sign that he and Chairman Brady and others are being responsive to the concerns they have heard and the recognition the politics of this, it just doesn’t make sense to do tax reform by imposing a $1700 tax on American families.

VARNEY: I came on strong at the beginning of the interview trying to press you, and say, ‘look, it’s dead.’ You killed it, you did it. I think I am right, whether you killed it or not doesn’t matter. I think it is dead and you are not going to give me an argument.

SHAY: We have heard the Senate – sort of up and down the line – from Republican members of the Senate express a lot of discomfort with this. There is not any enthusiasm in the Senate for this to go anywhere. You heard Secretary Steve Mnuchin at Treasury, you’ve heard Gary Cohen at the White House make public statements about their displeasure with this particular approach, so I think this is a positive development. I think there is a long way to go, as Speaker Ryan pointed out, and it is not going to be over until we get there. And we need to get there and I think we should be very clear on this. We will be just as vocal in support of a plan that doesn’t contain the border adjustment tax as we have been vocal about one that does. We are big champions for reform. We pay the highest rate of any industry in the country, we want to get this done and we will be out there tirelessly working to get tax reform across the finish line.

VARNEY: Okay, Matt, we’ll delay your victory lap for a couple days but after that you really have to come back to take a victory lap because you really did kill it.

SHAY: Victory is when we get tax reform done because it’s good for the American people and good for this country and that will be a victory for all of us.

About NRF
NRF is the world’s largest retail trade association, representing discount and department stores, home goods and specialty stores, Main Street merchants, grocers, wholesalers, chain restaurants and internet retailers from the United States and more than 45 countries. Retail is the nation’s largest private sector employer, supporting one in four U.S. jobs – 42 million working Americans. Contributing $2.6 trillion to annual GDP, retail is a daily barometer for the nation’s economy.

Contact:
Robin Roberts
press@nrf.com
(855) NRF-Press

Source: NRF

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Food Marketing Institute (FMI): no room for border adjustments in tax reform

ARLINGTON, VA, 2017-May-25 — /EPR Retail News/ — Food Marketing Institute (FMI) submitted a statement for the record to the U.S. House of Representatives Committee on Ways and Means hearing on Increasing U.S. Competitiveness and Preventing American Jobs from Moving Overseas: How Border Adjustment and Other Policies Will Boost Jobs, Investment, and Growth in the U.S. The nation’s food wholesale and retail industry employs more than 4.8 million people nationally, and helps support nearly 3 million additional jobs in supplier industries.

The economy has an enormous amount to gain from Congress’ efforts to reform the tax code in a way that lowers effective rates for all industries and creates a level playing field that does not advantage one business sector over another. FMI is confident that these efforts will not only create a more profitable industry, but will have enormous positive impacts on job creation and consumer spending.

Although the industry is generally supportive of efforts to move to a territorial system, there is no room for border adjustments in tax reform and the approach should not be considered. The type of border adjustment being discussed would inevitably lead to higher consumer prices. In an industry that operates on such a narrow profit margin anyway, grocers do not have the ability to absorb cost increases.

Border adjustment is, even under a best case scenario, a gamble. The wager, unfortunately, is a bigger tax bill for many food retailers and/or higher prices for consumers. There is no reason to make this bet; tax reform can and should proceed without a border adjustment.

Food Marketing Institute proudly advocates on behalf of the food retail industry. FMI’s U.S. members operate nearly 40,000 retail food stores and 25,000 pharmacies, representing a combined annual sales volume of almost $770 billion. Through programs in public affairs, food safety, research, education and industry relations, FMI offers resources and provides valuable benefits to more than 1,225 food retail and wholesale member companies in the United States and around the world. FMI membership covers the spectrum of diverse venues where food is sold, including single owner grocery stores, large multi-store supermarket chains and mixed retail stores. For more information, visit www.fmi.org and for information regarding the FMI foundation, visit www.fmifoundation.org.

Contact:
phone: 202-452-8444
fax: 202-429-4519

Source: Food Marketing Institute

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NGA applauds House Ways and Means Committee’s hearing on tax reform

ARLINGTON, VA, 2017-May-19 — /EPR Retail News/ — Today (May 18, 2017), the National Grocers Association (NGA), the trade association representing the independent supermarket industry, released the following statement on the House Ways and Means Committee’s hearing on tax reform:

“We applaud the House for taking an important first step towards a once-in-a-generation tax reform that can create a level playing field for American businesses and spur job growth in communities across the country,” said Peter J. Larkin, president and CEO of NGA. “Independent grocers are serious about achieving meaningful tax reform that will significantly lower effective rates for Main Street businesses.”

The independent supermarket industry is prepared to forgo certain tax provisions that have benefited the industry in exchange for a simplified tax code. Independent grocers believe the following principles should guide the House and Senate as they consider tax reform:

  • Lowering the tax rate across the board. Many industries are able to take advantage of narrowly structured deductions and credits to craft an effective tax rate in the single digits. Independent grocers have limited access to many of these deductions and pay at, or near, the top marginal rate.​
  • Maintaining the interest expense deduction. While most independent supermarkets do not generate meaningful amounts of interest income, many carry interest expense on their books. Grocers rely on debt to finance everything from daily operations to large renovations. Altering any piece of the deduction would slow economic growth and could lead to fewer jobs being created.​
  • Creating parity between pass-through entities and C-Corporations. Congress should not dictate decisions about or favor one type of legal entity over another. Tax reform must include both pass-throughs (which represent 95 percent of the business filing in the U.S. in 2012) and C-Corporations, and should create parity between the two structures. Both deserve a lower effective federal tax rate.
  • Rejecting a border adjustment tax (BAT). If a BAT is put in place, American consumers could face higher food prices for goods that in many cases are not produced in the U.S. (e.g., coffee, bananas). If the purpose of a BAT is to help create jobs, as proponents argue, then taxing products that cannot be made on American soil does not make sense.​
  • Preserving the use of last-in, first-out method of accounting (LIFO). The LIFO method of inventory accounting has been allowed since 1939 and is broadly used in the food wholesale and retail industry. LIFO helps protect against inventory price shocks that can result from inflation and is an important tool that aids the industry in long-term planning.​
  • Permanently repealing the estate tax. Well over half of the assets of a typical supermarket—the highest of any other industry sector—are not liquid, so the death of an owner creates a serious obstacle to the continuation of the business. Because the estate tax is assessed on the value of a business at the owner’s death, it often forces families to borrow funds to pay the tax. This tax could destroy family-held business, hurting communities by causing the loss of jobs.

Contact:

Tel: (703) 516-0700
Fax: (703) 516-0115

Source: NGA