A PricewaterhouseCoopers report commissioned by the Retail Industry Leaders Association (RILA) finds that comprehensive tax reform that reduces the corporate tax rate and treats all industries equally would provide a mix of benefits, including the creation of up to 327,000 new retail jobs, higher wages, lower prices for consumers, and increased capital investment.
The report also finds that in addition to being America’s second-largest private employer, the retail industry pays the fourth-highest domestic effective tax rate at 36.4 percent, more than 10 percentage points above the average for all other industries.
According to the report, 17.8 million Americans are employed by the retail industry. In addition, 10 million more jobs within other sectors, such as finance, transportation and manufacturing, are reliant on the retail industry. The report finds that a hypothetical tax reform plan that treats all industries equally and lowers the corporate tax rate to the current average of 26.6 percent would result in annual savings of more than $10 billion to the retail industry. The tax savings would lead to a mix of benefits, including the creation of up to 327,000 new jobs, increased wages, lower prices, and increased capital investment.
“With 1 in 5 American jobs reliant on retail, the industry is one of America’s most powerful economic engines. However, the retail industry’s treatment under the current tax code belies its prominent place in the economy and stifles job creation, investment, and consumer savings,” said Kirt Johnson, vice president for tax policy.
In addition to the billions of dollars retailers pay in federal, state and local taxes each year, retailers collect and remit billions more in sales taxes to state and local governments.
“RILA supports comprehensive tax reform that broadens the base and substantially lowers the corporate tax rate, and treats all industries the same. Doing so will free retailers to invest, expand their businesses, and most importantly, create new jobs,” said Johnson.
RILA is the trade association of the world’s largest and most innovative retail companies. RILA members include more than 200 retailers, product manufacturers, and service suppliers, which together account for more than $1.5 trillion in annual sales, millions of American jobs and more than 100,000 stores, manufacturing facilities and distribution centers domestically and abroad.
Links to Summary and Full Report.