RETAILERS SUPPORT TAX HOLIDAY
Byline: David Grant Caplan / With contributions from Joanna Ramey, Washington
NEW YORK — Executives from department and specialty stores on Sunday joined Sen. Charles E. Schumer (D., N.Y.) at Bloomingdales’ Manhattan flagship to express their support for a 10-day national sales tax holiday.
“Consumers are spending less, stores are losing business, sales for the major retailers here in New York City are down 15 to 20 percent,” said Schumer, at a press conference held at Bloomingdales’ fifth-floor holiday shop. “If it gets worse, many businesses will start to close, and many people — hardworking people with families who depend on them — may lose their jobs.”
Schumer added, “If we want to stimulate the economy and get ourselves out of this slump, there is no better way to pump money directly into the economy than by giving people the incentive to start spending again.”
Michael Gould, chairman and chief executive officer of Bloomingdales, said retailers “need a way to let the customer know that she has psychological permission to be self-indulgent.”
Added Greg Mills, J.C. Penney’s New York district manager, “the tax holiday would certainly be the type of stimulus that would help make for a successful holiday.”
Macy’s chairman and ceo Hal Kahn said he supports a tax holiday because of his chain’s dismal figures. “We were running 5 percent ahead pre-Sept. 11; post the 11th, we are running 15 percent behind,” he said. “Lack of tourism and a recession are the major causes.”
Officials from Ann Taylor, Modell’s, Toys R Us, J&R Music World, the Retail Council of New York and NYC & Co. were also in attendance.
Backers of a national sales tax holiday in Washington Friday also urged the President and congressional colleagues to consider their idea in upcoming talks about how to stimulate the economy.
The sales-tax holiday contingent on Capitol Hill — a mix of House and Senate Republicans and Democrats — said their plan is something both parties should widely endorse. Their pitch comes as GOP and Democratic leadership, after weeks of bickering, are starting from scratch in assembling legislation to help lift the flagging economy.
“The effect on the economy would be immediate, the return would be guaranteed,” Sen. Olympia Snowe (R., Me.), a co-sponsor of the tax holiday legislation, said at a news conference.
Under the sales tax hiatus proposal, the federal government would reimburse states and locales for taxes lost over a 10-day period. The holiday would be voluntary for the 45 states that collect sales tax and would generate as much as $6.5 billion in consumer savings on $100 billion in non-food, alcohol and tobacco sales, according to supporters.