AS RETAIL SALES PLUMMET, DEMS VOTE AGAINST PLAN
TO TEMPORARILY REDUCE THE STATE SALES TAX
Amidst a recent wave of bad news about declining retail sales, Assemblyman Vince Polistina today offered an amendment to a job growth incentive bill that would have enacted the Republican proposal to slash the state sales tax in half during the upcoming holiday shopping season.
?I am disappointed that with all economic indicators pointing to the worst retail sales period in several decades, Democrats were unwilling to consider this proposal,? said Polistina, R-Atlantic. ?The temporary reduction in the sales tax we have proposed could provide a much needed short-term benefit for consumers and businesses during the holiday shopping season.?
Polistina offered a bill substitute during today?s General Assembly voting session that would have exchanged a proposed $3,000 credit for each new job created by New Jersey businesses (A-3294) with a Republican plan to cut the state sales tax in half from Thanksgiving to January 4, 2009.
He said it is unlikely the $3,000 credit will provide enough of an incentive for struggling businesses to hire new employees and that a better approach would have been the sales tax holiday which would spur consumer spending, attract shoppers from neighboring states and hopefully boost sales enough to save jobs during this critical time of year.
The United States Department of Commerce reported on Friday that retail sales plunged by the largest amount on record in October as consumers cut back on spending in the wake of the financial crisis. Retail sales fell by 2.8 percent last month, surpassing the old mark of a 2.65 percent drop in November 2001 in the wake of the terrorist attacks that year.
The Associated Press reported recently that Circuit City Stores Inc., the nation’s second-biggest electronics retailer, filed for bankruptcy protection ?as nervous consumers spend less and credit has become tighter, and the retail industry overall is facing what?s expected to be the weakest holiday season in decades.? Just last month New Jersey-based Linens ?n Things began liquidating its inventory after having filed for bankruptcy.
Polistina and Assemblywoman Caroline Casagrande have introduced a bill, A-3327, to reduce the state sales tax from 7 to 3.5 percent from Thanksgiving through January 4th ? a plan that will spur economic activity at a time when the state?s economy is struggling.
Many businesses rely on the holiday shopping season to generate a profit for the year. If they fall short of that goal they may have to close their doors or eliminate jobs.