WASHINGTON The National Retail Federation has announced its support of a tentative bipartisan agreement that would temporarily extend Bush era tax cuts for all taxpayers regardless of income in return for extending unemployment benefits.
“Failure to renew these tax cuts would result in a massive tax increase at a time when our nation’s economy is still struggling to recover,” said NRF president and CEO Matthew Shay. “Higher taxes would stand in the way of creating the jobs that are vital to achieving economic recovery and would threaten to plunge us back into the recession that many consumers aren’t convinced is really over yet. Keeping current tax rates in place will allow retailers and other sectors of the economy to push forward with job creation. Adding a payroll tax cut to the mix will help with that effort while boosting consumer spending as well.”
“While many disagree on whether the tax cuts should be extended for those seen as wealthy, we cannot afford to subject all taxpayers to an increase while that debate continues,” Shay said. “Extending the cuts on a temporary basis is a prudent move that will allow our economy to regain stability while policymakers seek to settle that question. Many of the ‘wealthy’ taxpayers who will benefit from this agreement are small business owners whose business income is taxed as personal income and who are working every day to create jobs.”
Shay urged Congress to adopt the agreement by the end of the month, noting that employers will be obligated to increase workers’ tax withholdings beginning in January if legislation renewing the Bush cuts is not enacted by then.
NRF also welcomed a provision of the agreement that would set the federal estate tax rate at 35% on estates of $5 million and higher beginning in January. The estate tax was temporarily eliminated at the beginning of 2010 but returns to the Clinton-era level of 55% on estates of $1 million or more in January if Congress does not act. High estate taxes in the past have made it difficult for family-owned retail businesses to be passed from one generation to the next, according to NRF.