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    Stimulus Bill Doesn't Help Consumers Enough: NRF

    In a letter to the Senate, the trade group has repeated its call for national sales tax holidays.

    The National Retail Federation told the Senate yesterday that the economic stimulus legislation now under consideration doesn't do enough for consumers, and renewed its call for several national sales tax holidays to jump-start spending.

    "While the legislation...includes a number of provisions designed to produce long-term economic growth and job creation, we are extremely concerned that it does not do enough to immediately stimulate consumer spending or to preserve the tens of millions of jobs that consumer spending supports," said NRF SVP Steve Pfister in a letter to the law-making body. "With consumer spending representing two-thirds of GDP, it is difficult if not impossible to foresee an improvement to overall economic growth until consumers regain confidence and resume spending."

    Pfister urged the Senate to include measures that would give an immediate and considerable boost to consumer confidence and spending, such as the series of national sales tax holidays recommended by the trade group in December.

    "Retailers' considerable experience with sales tax holidays has shown that they provide a substantial inducement for people to shop," noted Pfister in the letter. "The increased sales resulting from these holidays would provide a direct infusion of liquidity into the economy, benefitting consumers as well as cash-starved states, which have seen a precipitous decline in sales tax revenues. Furthermore, sales tax holidays would help preserve and create significant numbers of jobs throughout interrelated sectors of the economy including the retail, manufacturing and transportation industries."

    The Senate is currently debating amendments to the American Recovery and Reinvestment Act of 2009, which was passed by the House last week.

    NRF proposed a series of national sales tax holidays to be held in March, July and October 2009, each lasting 10 days including two weekends. Tax-free treatment would apply to all tangible goods subject to state sales tax except tobacco and alcohol, ranging from retail merchandise and restaurant meals to automobiles. The federal government would reimburse the 45 states that have sales taxes for the lost revenue, and would provide the five states without a sales tax (Alaska, Delaware, Montana, New Hampshire and Oregon) with comparable revenue based on population.

    The organization estimates that tax holidays could save consumers nearly $20 billion, or almost $175 for the average family, based on the $236 billion in sales tax collected nationwide each year. Retailers have reported sales increases of 35 percent to 40 percent from recent state-level tax holidays, according to NRF.

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