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23 июня, 17:57

Fearing Border Tax, Retailers Boost Lobbying 31 Percent

by Kennett Werner It’s been a remarkably tough year for the retail sector. So far in 2017, retailers have set a record pace for bankruptcies and store closings. Household names are faring no better than small shops: J.C. Penney said it would shutter 138 locations in July; Macy’s expects 68 locations to close this year; and Sears Holdings will turn off the lights at over 170 Kmart and Sears stores. Since January, 50,000 retail jobs have been cut. Credit ratings agency Moody’s added to an already-grim outlook when, earlier this month, its list of U.S. retailers at risk of bankruptcy rose to 22. That’s higher than the 19 at-risk retailers singled out during the financial crisis. Amid this gloomy picture, retailers are lobbying more than ever. Lobbying expenditures rose by 31 percent in the first quarter of 2017 compared with the same period last year. So far in 2017, retailers have spent $16.4 million lobbying Congress. They spent $45.8 million last year. Retailers are pushing for “anything that puts money in the consumer’s pocket,” says Howard Davidowitz, an independent retail consultant. That means tax cuts are a top priority. It’s little surprise that lobbying spiked as Republican leadership in the House has called for a border adjustment tax. To encourage domestic production, the controversial tax arrangement would tax exporters at a lower rate than importers by allowing companies to deduct the cost of American-made goods from taxable revenue. Retailers, whose products are mostly imported, would be hard hit under the proposal. They argue that consumers would ultimately bear the cost of such a tax—to the tune of $1,700 each year—through higher prices. Retailers jumped into action to oppose the bill. CEOs of Target, Best Buy, and J.C. Penney, among others, met with President Trump in February. Retailers joined oil refiners and automakers to launch Americans for Affordable Products, an advocacy group that has aired ads criticizing the tax proposal. (Companies that primarily export, like Boeing and Dow Chemical, formed their own group—the American Made Coalition—in opposition.) Testifying before the House Ways and Means Committee, Target CEO Brian Cornell estimated that Target’s tax rate would increase by 40 percent with a border tax. He added that Target’s customers—“middle-class working families whose budgets are already stretched”—would bear the brunt through price hikes. Cornell got a sympathetic response from Rep. Erik Paulsen (R-Minn.), who once worked for Target and now represents the company’s home district. Paulsen said he could not support border adjustment in its current form. Behind the scenes, Target has spent $1.3 million lobbying just this year—jumping from number ten to number four in lobbying outlays among retailers since 2016, when it spent $1.7 million. Those efforts have kept border adjustment at bay. In an interview with CNBC last month, Treasury Secretary Steven Mnuchin criticized the scheme for creating an uneven playing field with “different impacts on different companies.” In private he has signaled to lawmakers that the tax proposal does not have White House backing. But retailers will not rest easy until they’ve killed off talk of border adjustment for good. That hasn’t happened yet: Border adjustment is tied to corporate tax reform, a centerpiece of the Republican agenda. (Authors of the Republican tax blueprint claim that border adjustment will raise $1 trillion in tax revenue over a decade, which will be necessary to offset revenue losses from their goal of a significantly lower headline corporate tax rate.) On Tuesday Speaker Paul Ryan (R-Wis.) made clear that he plans to push ahead with a tax overhaul in 2017. Earlier this month, House Ways and Means Committee Chairman Kevin Brady (R-Texas) said he wants to see border adjustment phased in over five years. Another lobbying issue for retailers is a digital sales tax. Here retailers are divided: On one side are remote sellers that have no obligation under federal law to collect and remit tax on Internet sales. On the other side are big-box retailers and Amazon, which do charge sales tax. In April, senators reintroduced a bill known as the Marketplace Fairness Act to address the discrepancy. (It passed the Senate in 2013 but never made it to the House.) The National Retail Federation, a trade group that has spent $2.3 million lobbying this year, backs the bill. A digital sales tax seems low on the list of lawmaker priorities. Mired in debates over healthcare and corporate tax reform, “Congress has bigger fish to fry,” says Richard Pomp, a law professor at the University of Connecticut. Part of the retail lobbying frenzy this year is due simply to the fact that there’s a new administration, adds Davidowitz, the consultant. “There’s a tremendous amount of change being talked about. It would be understandable that you want to get the word in as quickly as you can to the new people.” -- This feed and its contents are the property of The Huffington Post, and use is subject to our terms. It may be used for personal consumption, but may not be distributed on a website.

22 июня, 01:10

Coach Gains 20% in 3 Months Despite Headwinds: Here's Why

Despite the prevailing headwinds, Coach (COH) has exhibited a bullish run in the index in the past three months.

22 июня, 00:59

JC Penney Down 48% in 6 Months, What Are the Chances of Revival?

JC Penney's shares have declined a meager 0.4% in the past one month, which is an indication of possible recovery if the company continues to implement effective strategies.

21 июня, 23:12

eBay to Price Match Amazon, Walmart on Over 50,000 Items

On Wednesday, online retailer eBay Inc. (EBAY) announced a new initiative that would see it directly compete with some of the biggest names in e-commerce.

21 июня, 16:30

Zacks.com featured highlights: Chemours, Best Buy, Applied Optoelectronics and Lam Research

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21 июня, 15:54

Why Best Buy (BBY) Could Be a Top Value Stock Pick

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20 июня, 23:36

Children's Place Unveils Store Plans for South East Asia

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20 июня, 17:40

Ride These 4 Momentum Picks for Impressive Returns

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19 июня, 16:30

Zacks.com featured highlights: Nutrisystem, American Woodmark, Five Below, Best Buy and PetMed Express

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19 июня, 12:28

Bull of the Day: Best Buy (BBY)

Bull of the Day: Best Buy (BBY)

16 июня, 16:53

Signet (SIG) Down 37% in 6 Months, What's Hurting the Stock?

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16 июня, 14:33

Pick 5 Top-Ranked Profitable Stocks Using DuPont Analysis

Why you should depend on the DuPont technique to pick solid profit-generating stocks.

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15 июня, 16:55

Target (TGT) Raises Dividend to Boost Shareholder Value

Target Corp. (TGT) recently declared a 3.3% hike in its quarterly dividend.

15 июня, 16:01

Whirlpool (WHR) Hits 52-Week High on Robust Long-Term Goals

Whirlpool Corporation (WHR), a leading manufacturer of home appliances, hit a 52-week high of $202.99 on Jun 14 before closing at $196.54.

15 июня, 15:55

Will Soft May Retail Sales Make Investors Revisit Portfolio?

Two things will catch investor attention today and may lead to conflicting sentiments.

14 июня, 22:58

Should You Retain Kohl's (KSS) Stock in Your Portfolio?

Kohl's Corporation (KSS) has been in investors' good books of late. Shares of the company have been gaining momentum since the past year. Should investors retain this stock in their portfolio? Let's find out.

14 июня, 22:47

5 Large Cap Stocks to Buy Now

Investors can utilize the Zacks Rank, as well as our Style Scores system, to explore many solid large market cap stocks trading on the market today. Check out these five to consider right now.

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14 июня, 20:41

Best Buy's Next Move To Attract Customers: Rent Before You Buy

Best Buy has shielded itself from the “Amazon effect” through several innovative ways of attracting customers to its stores and ensuring that they transact on its platform via its integrated retail channel. The company's newest offering allows customers to rent items before buying.

14 июня, 16:35

Tiffany (TIF) Up 49% in One Year, Can the Bull Run Continue?

Tiffany & Co. (TIF) had a tremendous run in the past one year as the stock has returned 48.8%.