WASHINGTON In an effort to help spur consumer spending at stores and restaurants in the coming year, the National Retail Federation has asked President-elect Barack Obama to include a series of national sales tax holidays in his promised economic stimulus package.
The NRF requested in a letter that Obama speedily declare three tax holidays in March, July and October that would last for 10 days each and encompass a wide range of purchases, including restaurant dining. Under the plan, the federal government would reimburse states for lost revenue.
The NRF estimates that by eliminating the sales tax for the trio of 10-day periods, consumers would save nearly $20 billion. The U.S. Census Bureau says states sales tax rates run between 2.9 percent to 7.25 percent and add $236 billion annually to the total Americans pay for goods and services.
"The situation is critical," the letter said. "Experts are forecasting a week economy well into 2009. In October, consumer confidence was at its lowest level in the 41 years that records have been kept. This is due, as you know, to a disastrous combination of decreasing home values, increasing unemployment, reduced availability of credit, failures of major companies and weakness in the stock market."
In addition to supporting the national sales tax holidays, the NRF also advocates a long-term stimulus plan in the form of widespread investment in the country's infrastructure. "To produce longer-term, sustained growth, we believe that significant investment in infrastructure spending will provide jobs and increase GDP at a higher rate than most other government investments," the letter said.
The letter was signed by NRF president and chief executive Tracy Mullin and the chairmen and chief executives of J.C. Penney Co., Saks Inc. and PetSmart Inc. Ñ Myron Ullman III, Stephen Sadove and Philip Francis, respectively.
The National Council of Chain Restaurants is a division of the NRF.