Today, the Retail Industry Leaders Association (RILA) issued the following statement commending Chairman Baucus and Ranking Member Hatch for their dedication to achieving a simpler and fairer tax code and their most recent proposal to begin with a “blank slate.”
“The Senators' ‘blank slate’ approach places the burden on those who are protecting specific preferences in the code and asks them to explain why they should have a lower tax rate than everyone else. The government should no longer pick winners and losers among industries and it is our hope that this effort will result in a simplified and fairer tax code,” said Bill Hughes, Senior Vice President, RILA.
Today’s tax code is both unfair and irrational, resulting in a remarkably wide disparity in effective tax rates among businesses. The concept of starting with a “blank slate” is a positive step to correcting this critical problem with the current code. The unequal treatment of businesses distorts the market, hinders growth and disrupts the natural flow of capital.
“We commend Chairman Baucus and Ranking Member Hatch for their determination and commitment to simplify the tax code and achieve meaningful tax reform. It is vital for businesses, small and large, and individuals that the tax code be comprehensively reformed in order to spur economic growth and create jobs,” continued Bill Hughes, Senior Vice President, RILA.
RILA commissioned a PwC study late last year which clearly shows that the actual tax rate various industry sectors incur varies widely because of all the tax preferences in the code. The study found the retail industry to be the second largest private-sector employer in the U.S., and also that the retail sector incurs a domestic (federal and state) effective tax rate of 36.4%, fourth highest among the18 major industries and more than 10 percentage points higher than the average for all other industries. Our current tax code is simply unfair – why should some business sectors be required to pay a higher percentage in taxes than others. Given the enormous employment footprint of the retail industry, comprehensive tax reform could stimulate job growth in the retail sector and the industries supported by retail.
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.