CNN via Michelle Malkin -
Facing a disastrous holiday shopping season, the retail industry on Tuesday urged President-elect Barack Obama to incorporate three national tax-free shopping holidays in 2009.
The group wants the measure to be included in Obama’s stimulus efforts.
“The situation is critical,” the National Retail Federation (NRF) wrote in a letter to Obama. “In October, consumer confidence was at its lowest level in the 41 years. We urge you to act quickly on legislation to help stimulate consumer spending as one of the first priorities of your new administration,” the NRF said.
Under the industry group’s proposal, which would exclude alcohol and tobacco sales, the federal government would reimburse states for the lost tax revenue. State sales tax rates range from 2.9% to 7.25%, the group said. The five states without a sales tax — Alaska, Delaware, Montana, New Hampshire and Oregon — would also receive monies.
In a letter signed by the chief executives of retail chains, including J.C. Penney Co., Saks Inc. and Petsmart Inc., the NRF warned the situation was “critical,” with consumer confidence in October falling to the lowest level in the 41 years data has been collected.
…Tom Gallagher, a Washington, D.C.-based economist with ISI Group Inc., an broker-dealer and investment advisory firm, questions whether the NRF proposal would do much to boost consumer spending. “People might just shift the spending they would do anyway to those days designated tax-free,” he said.
“Tax free” shopping is anything but tax free shopping. It is an enormous bait-and-switch, confuse-the-consumer, booby-trap. Receiving a break from point of sale taxes does not mean that you won’t be paying those taxes in another form.
Caveat bailoutor.
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