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Aug 1, 2009
"The current recession will not end until the consumer regains his footing," Pfister continued in a letter to the committee. "Placing an additional tax on consumer spending would further depress spending, and lengthen and deepen the current recession." Pfister called a VAT, "a highly regressive tax, hitting lower and middle income taxpayers much harder than wealthier individuals." It would also, "greatly hurt," the 45 states that rely on sales tax as a major source of revenue.
"The enactment of a federal consumption tax would greatly crowd out the ability of the states to raise their own sales taxes at a time when they are desperately in need of revenue," Pfister pointed out. News reports have indicated that Ways and Means is debating whether to use a single broad tax, such as a VAT to pay for healthcare reform legislation under consideration by both the House and Senate, or to use a combination of smaller taxes. One estimate showed that a five percent VAT would generate $285 billion in annual revenue.
NRF has a long record of opposing any form of national consumption tax because of the impact on consumer spending, and Pfister said NRF would oppose a VAT, regardless of whether it was used to fund healthcare or for other purposes
Topic: Wholesale News
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