Arlington, Va. — The Retail Industry Leaders Association (RILA), the retail industry trade group, has come out swinging against a proposed national sales tax.
Congress is currently considering legislation that would impose a federal tax of 23 percent on the sale of most merchandise and services in place of federal income tax. According to RILA, tax experts predict a 25 percent to 30 percent sales tax would be required to offset the costs of moving from an income tax system to a consumption-based system. In addition, a national sales tax would be layered onto existing state and local sales taxes, putting the cost of many basic commodities out of reach for millions of Americans, the group argues.
“Radical proposals to impose a new, multibillion dollar sales tax regime on all Americans would threaten the U.S. economy and will have far-reaching, negative impacts on American consumers,” said RILA’s president Sandy Kennedy. “This legislation would hit low and moderate income Americans the hardest, punishing those least able to pay.”
Such a dramatic restructuring of the tax system would have a devastating effect on the retail sector of the economy and would create excessive administrative burdens for retailers, the trade group argues. “This new tax would significantly depress retail sales and damage the economy by sharply curtailing consumer spending that has been driving the U.S. economy during the past several years,” Kennedy said.
The retail industry is the second largest industry in the U.S. with $3.8 trillion in annual sales and 12 percent of the nation’s workforce. “Unfortunately, these employees will also be harmed by this legislation,” Kennedy said.