WASHINGTON — The National Retail Federation on Tuesday urged President-elect Barack Obama to support three 10-day sales tax holidays to help stimulate the economy. The move came as the Commerce Department reported that third-quarter gross domestic product fell 0.5 percent.
The NRF suggested in the letter that Obama include the measure in any proposed stimulus legislation. Under the NRF plan, the states would offer sales-tax-free holidays in March, July and October to encourage consumers to spend.
“Retailers’ considerable experience with sales tax holidays has shown that they provide a substantial inducement for people to shop,” the letter said.
The federal government would reimburse the participating states for any lost tax revenue and offer a comparable sum to states that already have no sales tax. By law, the federal government can’t require or encourage the states to change their tax policies. States would choose whether to offer the tax-free benefits and take the federal reimbursement if the plan were adopted.
New York Gov. David A. Paterson recently proposed eliminating the state’s sales-tax exemption on clothing and footwear priced under $110 to raise an estimated $462 million in 2009-10 and $660 million in 2010-11.
The NRF estimated its proposal would cost the federal government between $20 billion and $25 billion. In the same letter, the NRF stated its support for Obama’s infrastructure-based stimulus proposal.
The organization’s request comes amid falling consumer demand that most analysts feel will lead to the worst holiday sales performance in years.
The third-quarter contraction of GDP compared with the second-quarter expansion of 2.8 percent confirmed preliminary estimates, but the composition of the decline shifted. The economic bellwether — measuring the output of goods and services produced by labor and property in the U.S. — was pulled down more by a consumer spending drop than initially expected.
More of the same is anticipated in the fourth quarter. John Lonski, chief economist at Moody’s Investors Service, said steep retail discounts have not done much to buoy sales for the holiday season. He said consumers are nervous and many could be waiting for further discounting after the holidays.
Lonski said additional contraction will be propelled by deteriorating investments in residential housing and capital investments for businesses. A slowdown in exports also could weigh on the economy, he said.
“We are in the midst of the worst recession in the postwar period, even factoring in a massive stimulus program,” said Nariman Behravesh, chief economist at IHS Global Insight.
Behravesh predicted that fourth-quarter GDP would dive 6 percent, even if the Obama administration is able to quickly pass a stimulus package that could approach $1 trillion.
@tradesy is turning the concept of a showroom upside down with its new space in Santa Monica. Here, the company plans to hold events, art exhibits and a showcase rare fashion pieces like this Louis Vuitton boxing set. Get all the details on Tradesy’s first showroom on WWD.com. #wwdnews
Spotted last night at the @erdem x @hm launch event: Kate Bosworth, Rashida Jones, Kirsten Dunst and Selma Blair. The party, which took place in LA, also marked the opening of their pop-up shop. “I was interested in creating a collection that wasn’t in any way disposable. It was about pieces you’d create and keep forever, things that have a permanence to it,” designer Erdem Moralioglu said. #wwdeye (📷: Katie Jones)
Renee Zellweger in yellow in 2001 and again in 2017. Chosen as one of the 12 @pantone Leading Spring Colors (and dubbed “Meadowlark”), it only makes sense that the bright hue stands the test of time and is making a resurgence this season, seen already on stars like @blakelively and @gigihadid. (📷: Donato Sardello & @rexfeatures) #wwdfashion #tbt
Dior’s 70th anniversary celebration continues with a new exhibition at the Royal Ontario Museum in Toronto. “Christian Dior,” which is scheduled to run through March 18, takes a look at the founders tenure from 1947 to 1057 and feature 40 designs. Pictured here is an evening gown from the Ailée, fall 1948-49 haute couture collection. #wwdfashion (📷: Brian Boyle)
As one of the most recognizable models in the world, Christy Turlington Burns has an insider’s view of the fashion industry and the allegations of sexual harassment swirling around it. “I can say that harassment and mistreatment have always been widely known and tolerated in the industry. The industry is surrounded by predators who thrive on the constant rejection and loneliness so many of us have experiences at some point in our careers,” Turlington told WWD, along with her suggestions for how the modeling world should protect younger women and men. Read more on WWD.com. Link in bio. (📷: Tony Palmieri) #wwdnews
@asics America has tapped a new brand ambassador: famed DJ/record producer @steveaoki. This initiative is intended to set the tone for the new brand identity and philosophy and will include partnerships with influencers and in-store and off-line activations that will continue into next year. This is Asics’ most significant marketing effort in two decades, and is expected to attract younger consumers to the brand. #wwdfashion
24-year-old Jean Prounis is redefining the rules of jewelry. Formerly a studio assistant to Jemima Kirke and a design apprentice at Ghuran, she focuses on handcrafted subtleties and ancient goldsmithing techniques. “There was a really sterile feel in the environment and I wanted to have jewelry with character that shapes how you wear it everyday,” Prounis said. Each piece is hand made in New York, either by Prounis or three other jewelers in the district. #wwdfashion
“These collections continue to build on that vision, empowering differently abled adults to express themselves through fashion,” said @tommyhilfiger of his line of adaptive apparel, which launches today. The line consists of 37 men’s and 34 women’s styles based upon the pieces from the spring Tommy Hilfiger sportswear collection. #wwdnews