Congressional Republicans handed the Trump administration its first major legislative accomplishment today when the House passed a $1.5 trillion tax cut, the largest overhaul of the U.S. system in more than three decades. The bill, which will slash tax rates for individuals and corporations, is now headed to President Donald Trump’s desk for his signature.
Though the sweeping overhaul is positioned by the administration to boost American competitiveness and ignite economic growth, it may not help as many small-business owners and the middle class as projected, said footwear retailers.
“I don’t think it will affect me in any significant way businesswise, and overall, the bill is horrific for the public,” said Lisa Katz, owner of The Bootery, which has stores in Closter and Ridgewood, N.J. “The corporate [aspect] benefits big business and not little business. For [most] people, any benefits they might see will go away. My fear, personally, is that entitlement programs will need to be cut to pay for the tax cut.”
On Wednesday, House lawmakers passed the tax bill 224 to 201 after tweaks to the Senate bill, which passed earlier in the day along party lines 51 to 48.
But the passage of the bill is likely to give business owners more capital to hire additional staff or allow for expansion.
“When the corporate taxes fall — it goes from 35 to 21 [percent] — that should give us more working capital to further reinvest in our business,” said Lester Wasserman, vice president of Tip Top Shoes and owner of sneaker shop West NYC.
The National Retail Federation cheered the news of the bill’s passage and its potential impact on merchants.
“Passage of tax reform is a major victory for retailers, who currently pay the highest tax rate of any business sector, and for the millions of consumers they serve every single day,” said NRF president and CEO Matthew Shay. “Our priorities were clear: reform must jump-start the economy, encourage companies to invest here in the United States, increase wages and expand opportunities for employees, and protect our small-business community, of which the vast majority are retailers. That’s exactly what this legislation will achieve. Most importantly, this historic tax reform will put more money in the pockets of consumers.”
But some retailers aren’t convinced shoppers will be able to buy more goods.
“The tax cut isn’t going to be something that shows in anybody’s pocket until 2019,” said Katz. “All of a sudden, 10,000 more people aren’t going to walk through my door.”
Rick Ravel, president of Austin, Texas-based Karavel Shoe Stores, said he is unlikely to expand his business with the extra funds.
“We’re fully staffed,” he said. “No one’s going to expand. You’re going to see [public companies] buy their stock back and force the price up. Then they [can] give more dividends to the stockholders. If your business is good, you’re going to invest no matter what. Who will make more is the president and chairman of the board.”
With contributions from Barbara Schneider-Levy and Peter Verry