NRF BOARD VOWS TO FIGHT CONSUMER SPENDING TAX

Byline: Joyce Barrett

WASHINGTON--Alarmed at key Congressional support for a consumption tax, the board of directors of the National Retail Federation plans to meet today with Rep. Bill Archer (R., Texas), chairman of the House Ways and Means Committee, to object to any form of taxation on consumer spending.
"This industry has never been supportive of a consumption tax," said John Dill, NRF senior vice president of government affairs. Archer is holding the second of three days of hearings on tax reform today and said upon convening the first session Tuesday that he favored a "broad-based consumption tax" to replace the current tax system, which he said "is too broken to be fixed."
Archer has said he favors a 16 percent tax on consumer and business spending for all items with the exception of health care and some housing expenses. The consumption tax, Archer said, also should be levied on imports when they enter the U.S.
Such a tax would be a burden on retailers, according to Arthur P. Hall, a senior economist at the Tax Foundation, who testified during Tuesday's first hearing before Archer's panel.
Hall said he favored any of the three approaches to tax reform being considered on Capitol Hill, including a plan advocated by Rep. Dick Armey (R., Texas) which would impose a flat tax of 17 percent on individuals and firms after subtracting certain deductions. Another plan, put forth by Sens. Sam Nunn (D., Ga.) and Pete Domenici (R., N.M.) would exempt money used for savings or investment from taxation. The third proposal is some form of a consumption tax, which is the only plan that meets Archer's requirement that taxpayers no longer be required to file their taxes with the Internal Revenue Service.
Speaking at an NRF luncheon Tuesday, Commerce Secretary Ronald Brown reiterated the Clinton Administration's opposition to any form of consumption tax, saying such taxes are regressive and would put the U.S. in the same position as many European countries, where value-added taxes, applied at every step of the manufacturing process, drive up consumer prices to much higher levels.--Fairchild News Service

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