Mart and Target increase fight against tax proposal
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In this Thursday, May 26, 2016, photo, a woman pushes her shopping cart as an employee pulls a long line of carts outside a Target nike j crew store in Encinitas, Calif. More than 100 retailers, including Wal Mart and Target as well as key trade associations, are launching a new coalition aimed at fighting a Republican proposal on how imports get taxed, which they believe would harm their businesses. (AP Photo/Lenny Ignelzi)
NEW YORK (AP) More than 100 retailers including Wal Mart and Target as well as key trade associations are launching a new coalition aimed at fighting a Republican proposal on how imports get taxed, which they believe would harm their businesses.
The National Retail Federation, along with the American International Automobile Dealers Association, the National Grocers Association and others are joining forces to form Americans for Affordable Products, which will run a campaign to educate consumers and show lawmakers that the so called Border Adjusted Tax plan would lead to higher prices of as much as 20 percent on everyday items including clothing, food and even gas. The diversified group, which also includes such companies as Nike, Best Buy, luxury conglomerate LVMH and Dollar General, is trying to make their opposition heard even while Congress and the president try to sort out exactly what adjustments to put forth. companies to move overseas, sharply cut the corporate tax rate to 20 percent from 35 percent, and encourage more factory output at home. But opponents say the plan would have a harmful rippling effect, causing companies to even lay off workers. The proposal spearheaded by House GOP Speaker Paul Ryan and Missouri Rep. Kevin Brady, the top Republican on the House tax writing nike 5.0 committee would constitute the most sweeping reforms to corporate taxes in at least three decades.
"There a rush to get this done in Congress. We want to make sure our voices are heard," said David French, chief lobbyist for the National Retail Federation, which has been dispatching members to meet with different levels of the new administration as well as lawmakers. Details of the consumer campaign are still being worked out, according to a spokeswoman at the retail trade group.
A lot is at stake. shoppers buy are either wholly or partly produced overseas as companies have sought the cheapest way to make goods. retailers haven had the power to raise prices on many goods for several years.
"I losing sleep. I am scared out of my mind," said Rick Woldenberg, CEO of Learning Resources, which has signed on to the coalition.
"When they crunch the numbers, it really affects things like solvency and profits."
Lamar said companies would likely have to pass along higher prices to shoppers, who wouldn tolerate it. Companies say they also would have to try to squeeze suppliers for more savings and fear they might even have to lay off workers or close stores.
George Feldenkreis, CEO of Perry Ellis International, estimates that he would have to raise prices on his clothing anywhere from 20 percent to 25 percent if the border tax went into effect. Shirts currently range in price from $14.99 to $49.99.
"People who are thinking about it don know the consequences," Feldenkreis said. He added that the company would also have to lay off workers. "It not just a retail implication," said Jack Kleinhenz, chief economist at the National Retail Federation. "We know it going to impact Main Street in many ways. It could be autos, nike shoes preschool manufacturing."
The proposal would essentially tax corporations based on where their products and services are consumed, rather than on their incomes. sales only, it would exclude a company export sales. But the cost of imported goods would be taxed. But many economists and industry executives worry the dollar wouldn adjust, or certainly not fast enough.
And Lamar said a shirt label saying "Made in China," doesn tell the whole story.
"It those kinds of things that we are looking at, planning on, if this comes to pass," Sands said. "We don expect consumer demand for our product to be affected."
He also doesn believe that changes in foreign exchange rates will offset the costs of the plan for retailers. And even if it did, he says relief wouldn come right away."I am not going to play the currency markets to run this business," he said. "I want to make toys. I am not a forex trader."