October 23, 2001
Michigan retailers advocate national sales tax holiday
LANSING -- The nation needs a sales tax holiday to boost consumer spending and bolster the sagging economy, Michigan Retailers Association (MRA) Chairman and CEO Larry Meyer told the House Commerce Committee today.
In a hearing to discuss solutions to the country's economic woes, Meyer advocated a plan to have states suspend collection of sales tax for a seven-to-10-day period at the start of the Christmas shopping season. The federal government would reimburse participating states for lost revenue, estimated at $6.5 billion nationwide. The plan, proposed by a national coalition of business groups, is expected to be introduced in Congress soon.
"A sales tax holiday at the beginning of the Christmas shopping season will jumpstart consumer spending in this crucial period," said Meyer. "Consumers will jump at the chance to save the sales tax. Retailers will offer additional promotions to further entice shoppers."
Consumer spending, which kept the economy out of recession during most of this year, has suffered in the climate of national uncertainty following September's terrorist attacks.
"Consumer spending accounts for more than two-thirds of our country's Gross Domestic Product," Meyer said. "In any consideration of ways to stimulate the economy, increasing retail sales should be first on the list."
Meyer said the sales tax holiday was an ideal way to provide "immediate, targeted tax relief" to consumers.
"State revenues will be maintained through federal reimbursement," he said. "Dollars will be circulated into the economy, giving it a much-needed boost. And consumers and retailers will enjoy every minute of it."
The Michigan Retailers Association is the unified voice of retailing in Michigan and the nation's largest state trade association of general merchandise retailers. MRA's more than 5,600 retail business members operate more than 12,000 stores across the state.
