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Kennedy: Regulatory Challenges Curtail Recovery Effort

The best thing the federal government can do to help the American economy recover is to create a regulatory environment that will enable U.S. businesses to create the jobs the country is craving.

As the retail industry works to regain the more than 1.2 million jobs lost during the recession, too many unnecessary regulatory challenges stand in the way. An unrelenting stream of new regulations is compounding the effects of out-of-date laws that stifle retailers’ ability to make the kinds of investments that will yield long-term economic benefits of growth and job creation.

As one of America’s top private employers, the retail industry is a critical voice in today’s debate over how government can help, not hurt, job creation.

Retail is the fiber of the American economy, employing almost 15 million Americans and contributing trillions of dollars in economic activity. Retailers pay billions of dollars in federal, state and local taxes and collect and remit billions more in sales taxes. The industry’s role in the economy cannot be understated. Nearly every public policy debate has some link to retail businesses, their employees and consumers and, ultimately, the industry’s ability to create the jobs so sorely needed.

A case in point is the current debate over whether online companies should be allowed to continue to exploit a pre-
Internet loophole that allows them to avoid collecting sales taxes. This decades-old loophole gives online retailers an unfair advantage over their brick-and-mortar counterparts, hurting those Main Street retailers whose contribution to communities is bigger than just the goods they sell. Thankfully, Congress is on its way to fixing this problem.

Last year, the Marketplace Equity Act and the Marketplace Fairness Act were introduced with broad bipartisan support. These two bills would close tax loopholes by requiring remote sellers, such as Amazon, to collect taxes through a simplified system that respects states’ rights and levels the playing field for retail merchants.

Conservative governors such as Indiana’s Mitch Daniels and former Mississippi Gov. Haley Barbour have endorsed this approach. In fact, despite the intense partisan rancor that too often defines Washington, this issue enjoys strong bipartisan support.

Overall, tax policies that create jobs and bring price-competitive value to American consumers are desperately needed. Such policies can spur economic growth by maintaining low-income tax rates to help taxpayers keep more of what they earn for savings, investment and spending.

The thousands of changes made since the tax code was last reformed has done the opposite and has resulted in a remarkably complicated and unfair tax system that hurts businesses and individuals and diverts energy away from job creation.

Other pressures on retailers are coming from the overregulation and unnecessary interference in the employer/employee relationship.

We proudly joined the entire business community in opposition to the Employee Free Choice Act in 2009, the card check bill, which would have denied workers a secret ballot when voting on whether to join a union and given government arbitrators, not managers and employees, the power to determine wages, benefits and work rules. While that effort was soundly defeated, employers now face a similar threat as the Labor Department and the National Labor Relations Board seek to impose much of the failed legislation by regulatory fiat. This effort is remarkably counterproductive to job growth, and to be overturned, it will require the same level of urgency and solidarity as blocking the card check bill generated.

Right now, too many unnecessary regulatory challenges are standing in the way of job growth. As the representative of the retail industry’s largest employers, we are committed to changing this environment and pleased to have so many allies. Our collective prosperity depends on our success in shifting the rhetoric of job creation into meaningful action.

Sandy Kennedy is president of the Retail Industry Leaders Association.

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