Where Does The Retail Industry Stand Following The Fiscal Cliff Negotiations?
By Debbie Hauss
Just a few short hours ago, the U.S. House of Representatives voted to approve the deal that would rescue the country from immediate fiscal disaster, but the long-term health of the economy remains in question.
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So what will be the repercussions for the retail industry? Obviously, if unemployment continues to rise, many Americans will halt spending. Also, with the payroll tax cut eliminated, working consumers will have less money on hand and will likely cut back on spending. Additionally, as the national debt continues to rise, the country’s long-term future is at risk.
Tax reform is key to the long-term health of our economy, according to a December 12, 2012 statement issued by Matthew Shay, President and CEO of the National Retail Federation (NRF):
“The National Retail Federation and our members have long advocated for comprehensive tax reform that includes broadening the base and lowering rates so that American businesses — which pay the highest corporate tax rates in the world — can compete on a level playing field in the global marketplace.
“While we are pleased that the President has historically supported and recently indicated his willingness to address the issue, this should not be a proposal made in the 11th hour of the fiscal cliff debate or made for political purposes to advance a narrow agenda during this crucial time in our history.
“If Congress and the Administration are serious about reforming our uncompetitive tax system, it’s critically important that the plan is discussed openly and in detail — with every stakeholder — and should be just one part of a broader approach to reforming the long term fiscal situation of the U.S. economy.
“Any change to the tax code should free businesses — large and small — to drive economic recovery through job growth and investment.”
The retail industry will forge ahead, as always, but possibly with a bit of trepidation this year. As we prepare for the annual NRF Big Show this month in New York, I’m reminded of the feeling on the show floor a few years ago, during the recession. Our coverage reflected the fact that attendance was down and it was eerily quiet in the exhibit hall at times. Retailers and solution providers were worried about the future of their businesses. In fact, a number of companies closed their doors due to the economic pressures.
The companies that made it through came out on the other side with a new outlook. They knew that consumers’ mindset had changed, probably permanently to some degree, and they acted accordingly. That type of strategy will likely help those and other companies thrive through this current uncertainty.
During a keynote scheduled for January 14 during the 2013 NRF event, Kofi Annan, Secretary-General of the United Nations, will share his insights on developing healthy and prosperous societies. Maybe he will inspire us to think about the retail business in a different way.
So, Happy New Year! My hopes for this year, aside from world peace and happiness for all, include a wish that the facets of our government can work together to prepare the country for a healthy future. On a personal note, I have three children who are in various stages of cementing themselves in the workforce, while working to pay back significant college loans. I hope that they, along with their peers and future generations of U.S. citizens, will have a safe, secure and bountiful country to call home.
Follow Debbie on Twitter: @DHauss
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