With the string of retail stores closing since the start of 2017, there are mounting concerns the retail sector is in the midst of a crisis. Additionally, the potential inclusion of a border adjustment tax in a Republican tax reform plan is increasing fears of a dramatic decline of the industry. National Retail Federation CEO Matt Shay discusses the state of the industry and the potential impact of a border tax.
Though Shay agreed the numbers are concerning, he viewed it more as the impact of retail’s transition to e-commerce.
“I’d say we’re in a period of rapid transformation and serious evolution. And so, I saw a chart this week that showed that the public announcements of store closings just from the first of this year are close to 4,000 stores being closed.” Shay told the FOX Business Network’s Stuart Varney.
On the other hand, Shay still sees retail as a strong and vital part of the U.S. economy.
“I think we have to put that into context though. The retail industry is the largest private sector employer in the United States. It employs 42 million Americans.”
But, according to Shay, the blow from a potential border tax would have a much broader impact beyond just retailers.
“We think this is bad for consumers, it’s bad for the economy, it’s bad for people who voted for the president and for those Republican members in the House and the Senate. They didn’t vote for a tax increase. This is a $1 trillion increase in taxes on consumers in this country on everything they buy - automobiles, gasoline, drugs, clothes, food.”
Shay took on claims that a border tax was necessary to achieve tax reform, saying, “The biggest myth about this that we need border adjustment tax to do tax reform, we do not.”