Thursday, November 8, 2012

What does Obama's reelection mean for retailers?

What will a second term for President Barack Obama mean for retailers in the US? The National Retail Federation's take on things is a little glum, foreseeing likely higher costs from health care reform and a greater emphasis on labor issues that could make it easier for workers to unionize.

"The top issue facing our nation the day after the election is the same as it was the day before the election – the economy," NRF chief executive Matthew Shay said Tuesday morning, in a statement. "The U.S. needs public policy that encourages economic growth and removes barriers to job creation."

 In the NRF's view, Obama's reelection is likely to lead to faster implementation of the Affordable Care Act, and eliminate the possibility of its repeal. That could raise the cost of doing business for retailers who employ lots of part-time workers.

On labor relations, the Obama administration is seen as more sympathetic to employees: "Reelection will likely mean a more active labor agenda ahead...Some of the more controversial approaches taken by the National Labor Relations Board on ambush elections, micro-unions and union access to the workplace are already under legal challenge."

One area many bricks-and-mortar retailers are concerned with is making online companies pay state sales tax. The retailers badly want to see online businesses charge the same taxes, which they think will help level the playing field. That legislation could move forward, the NRF said: "A new bipartisan sales tax fairness bill, granting states’ authority to require online sellers to collect sales tax on all sales if certain simplifications are adopted, is expected to be released by cosponsors reconciling differences between the current House and Senate versions. As lead cosponsor of the Senate bill, Majority Whip Richard Durbin, D-Ill., will continue his push to pass the legislation while fiscal cliff negotiations continue." 

An Obama administration could mean higher taxes on small businesses and high earners, the NRF says, although those are not completely certain as fiscal cliff negotiations begin. "Most of the $500 billion in tax increases are as a result of the expiration of the Bush tax cuts for individuals, and could have a substantial impact on consumer spending," the NRF warns.

Two other issues might not be as prominent in consumers' minds, but could still have a big impact on retailers. Cyber-security and  consumer privacy are both likely to be areas the administration focuses on, the NRF says: "This includes the administration’s efforts on the Consumer Privacy Bill of Rights, examination of mobile app privacy policies by the Commerce Department’s National Telecommunications and Information Administration, and the National Strategy for Trusted Identities in Cyberspace. Privacy and data breach notification legislation will likely be reintroduced without many changes in both the House and Senate."


Gerald Harris said...

Taxing online business like the brick and mortar business will definately level the playing field, however it will tend to push some people to think twice about their online selling volume. There are many people who sell on place like ebay who not only have to pay ebay and paypal fees, but on top of that retail sales tax? 2 entities would lose over time: Ebay and the retail owner. Many business work on slim profit margins and depend on sites like ebay to drive sales to their businesses. Taxing would have to become very strategic if a business owner wishes to continue selling and profiting online.

Alex said...

That could raise the cost of doing business for retailers who employ lots of part-time workers.
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