Retailers have long opposed value-added tax (VAT) proposals believing that the imposition of such fees would negatively affect consumer purchasing and ultimately the health of the industry.
Now, the Retail Industry Leaders Association (RILA) has gone on record as being against a proposed VAT that would help pay for proposed healthcare reforms.
Katherine Lugar, executive vice president, public affairs for RILA, who wrote to Nancy Pelosi, the speaker of the U.S. House of Representatives, said a VAT (AKA sales tax) would be "highly regressive and pose particular harm for low- and middle-income consumers who spend a higher percentage of their earnings on basic necessities such as food, clothing, and household products."
Ms. Lugar added, "With the nation's economy showing some signs of recovery and the holiday shopping season right around the corner, the last thing this country - our businesses and our consumers - needs is a new supplementary tax system that will increase retail prices and threaten American jobs."
Discussion Questions: Does a value-added tax make sense in place of all or some of the federal income tax? Is there any scenario where you could see the retail industry getting behind a VAT?