N.G.A. Against Tax Hikes in Jobs Act
In a letter sent this week to the U.S. Senate, Peter Larkin, president and CEO of the National Grocers Association (N.G.A.) laid out the Arlington, Va.-based trade group’s opposition to tax increases within the American Jobs Act. “N.G.A. members feel strongly that appropriate tax policies should promote economic growth, such as the accelerated depreciation incentives that promote investment in equipment and business expansion,” Larkin wrote. “The resulting economic growth will not only create jobs within retail and wholesale grocery companies, but also in the communities they serve and the manufacturing, construction and supply industries.”
N.G.A. has come out against numerous tax increase proposals included in the American Jobs Act. “Contrary to such pro-growth tax policies are those being advocated in the American Jobs Act that would raise the tax burdens on community-focused business entrepreneurs who are providing and creating jobs,” Larkin explained in the letter. “These proposed negative tax policies include raising the tax rates on those individuals earning over $200,000 and married couples earning over $250,000, repealing the Last In, First Out inventory method, and raising federal estate taxes on family-owned business by reducing the exemptions and raising the rates to 2009 levels.”
According to Larkin, the taxes would negatively affect retail and wholesale grocers having a hard time making ends meet during the sustained economic downturn with an unemployment rate of higher than 9 percent.
Last month, the association released the 2011 Independent Grocers Financial Survey, which provides up-to-date research and analysis on the health and profitability of the independent grocery industry. This year’s survey found that independents are going through prolonged period of tighter-than-usual profits.
Along with tighter profit margins, Larkin pointed to how hard it was for independents to access credit, noting that “four in 10 independent retailers shared that the difficulty of obtaining capital influenced their companies,” with more than 70 percent of retailers reporting that they couldn’t fund planned remodeling activities, while more than 25 percent couldn’t get credit for operations.
The fate of the act is currently up in the air, as Senate democrats failed to pass it Tuesday evening.