Not only will the budget being pushed by Senate Democrats raise taxes by nearly $1 trillion, they want to make it easier for states to go after tax dollars from online sales.
The budget proposed is in the Senate is bad enough. As noted, it’ll raise taxes by $1 trillion, it doesn’t balance the budget or set a path to pay down the national debt, and many of the savings in the proposal are double-counted. How could they possibly make it worse? By adding the Marketplace Fairness Act, which will apparently be presented as an amendment to the budget as early as this week.
While the bill has nice name, it’s protectionist in nature. It’s being pushed by traditional, brick-and-mortar retailers who have seen their business slide due to the popularity and convenience of online retailers. Many governors — including some Republicans — also like it because it would give them a new revenue stream.
Sales on Black Friday, the biggest day of the year for retail, fell short this year:
Preliminary sales data from [ShopperTalk], a Chicago research firm that tracks sales at more than 50,000 stores, showed shoppers spent $10.66 billion when they hit the malls on the day after Thanksgiving. That’s only 0.5 percent more than last year when Black Friday sales rose a striking 3 percent.
The problem with using retail sales as a calculation is the same as using topline figures for a business to determine its health. Sales numbers are important, but we’re missing a critical piece — the cost of the sales. After all, anyone can sell a lot of merchandise if they’re willing to do it at a loss.
Discounts moved from traditional low-margin seasonal gift ideas to staples, where retailers usually hope to recoup their bottom lines. That could be very bad news; as Ashley Heher notes, last year’s 3% Black Friday increase heralded a 4.4% drop in the overall holiday shopping season, topline. If retailers bought a 0.5% increase through deeper discounts, the margin on those sales will be thinner, and they may have pulled some future sales into Black Friday as a result.
We still have Cyber Monday to come, but consumers are still being cautious, even at Christmas. Despite what we are constantly told, all is not well with the economy.
In an effort to save our children, the nanny-state has struck again. The Consumer Product Safety Act of 2008 was recently passed, and it’s sure to wreak havoc where ever it goes. It essentially requires testing for dangerous chemicals in almost all products that are intended for children 12 and under. This includes clothing, shoes, books, toys, jewelry, cds, board games and more.
While this law may not pose much of a problem for large retailers, for those who operate small businesses or own resale shops (including charity stores such as Goodwill), this legislation is potentially devastating. In most cases, the costs for having the products tested greatly outweigh any potential profit and talks of fines up to $100,000 and possible jail time will probably keep most from bucking the law.