Washington, D.C. The National Retail Federation told Congress that the economic stimulus legislation being negotiated between the House and Senate on Thursday would provide assistance to consumer spending but still doesn’t do enough to provide the jumpstart that would bring shoppers back into stores.
NRF welcomed the legislation’s “Making Work Pay” tax credit, a Home Ownership Tax Credit for homebuyers and other initiatives aimed at low- and middle-income families, saying they would make a contribution to the economy because those taxpayers are most likely to spend the extra cash.
“While these and other individual tax provisions will provide stimulus, this massive measure still fails to provide the direct and targeted tax relief needed to stimulate consumer spending,” said NRF senior VP, government relations Steve Pfister. “With consumer spending representing two-thirds of GDP and consumer confidence at the lowest level since records have been kept, it is difficult, if not impossible, to foresee an improvement to overall economic growth until consumers regain confidence and resume spending.”
NRF believes the best solution to accomplish this goal would be a series of national sales-tax holidays.
“The increased sales resulting from these holidays would provide a direct infusion of liquidity into the economy estimated at $20 billion, benefiting consumers and cash-starved states, and would preserve and create significant numbers of jobs through interrelated sectors of the economy, including the retail, manufacturing and transportation industries,” Pfister said.
Pfister’s comments came in a letter to members of a congressional conference committee working to negotiate a compromise between versions of the American Recovery and Reinvestment Act passed by the House and Senate.