National Sales Tax Would Stunt Consumer Spending, Slow Recovery

Arlington, VA – With the presidential campaign in full swing and discussion of a new national sales tax as a component to tax reform being discussed, the Retail Industry Leaders Association (RILA) reiterated the strong opposition of the retail community to any sort of national sales tax or Value Added Tax (VAT).  Katherine Lugar, Executive Vice President for Public Affairs, issued the following statement regarding the retail community’s opposition to any form of national consumption tax.

“While the retail industry supports comprehensive tax reform and generally commends efforts to simplify and flatten the tax code, a national sales tax would neither improve federal tax policy nor jumpstart economic growth.  With two-thirds of our economy dependent on consumer spending, anything that stifles consumer activity would have severe economic consequences.  A national sales tax or VAT would severely stunt consumer spending and ultimately dampen our country’s already fledgling economic recovery.

“All candidates who are willing to think outside the box should be given some measure of credit for seeking bold solutions to our struggling economy, but those solutions must also be judged on their ability to restore economic growth.  On this crucial test, a national sales tax fails as an economic boost or jobs generator and should not be the centerpiece of any economic recovery plan."

Retail Industry Leaders Association (RILA) is a trade association of the largest and most successful companies in the retail industry. Its member companies include more than 200 retailers, product manufacturers, and service suppliers, which together account for more than $1.5 trillion in annual sales. RILA members operate more than 100,000 stores, manufacturing facilities and distribution centers, have facilities in all 50 states, and provide millions of jobs domestically and worldwide.

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