RILA looks ahead to what retailers can expect in the coming year
With the historic 2016 election behind us, there has been much speculation about what to expect from Washington in the coming year.
With consideration of a Republican-controlled Congress and President-elect Trump’s proposed policies, the Retail Industry Leaders Association has outlined below the key legislative and regulatory issues retailers should be aware of in 2017:
Tax reform
Both Trump and Congressional leaders have indicated that tax reform is a priority in 2017. Given that the retail industry’s effective tax rate is the fourth highest domestic effective tax rate of all 18 major industrial sectors, retailers have long advocated for comprehensive tax reform that levels the playing field for all businesses.
Trump has released some of the details of his corporate tax proposals and has repeatedly called for the U.S. tax system to be more competitive globally throughout his campaign. His plan and the proposals from U.S. House and Senate leaders differ in the details, although all introduce changes to corporate tax policy.
While it remains to be seen by which approach tax reform will move forward, it is highly likely that the industry will see movement on this issue in 2017.
Workforce issues
The Obama administration has issued a series of workforce regulations over the past several years, and it is expected that the Trump administration will look to roll back some, but not all, of these policies. While it remains to be seen which specific policies Trump will address, the Department of Labor’s (DOL) overtime and persuader rules, ambush election rules, micro-unions, and joint-employer have all been a point of disagreement between Republican leaders and the Obama administration.
Trump has offered little detail on his perspective on workforce issues, but it is assumed that strong advocates in Congress will push for policies that encourage innovation and economic growth. Retailers have argued that policies like the overtime rule, ambush elections, micro-unions, and joint-employer stifle economic growth and threaten flexibility and opportunity in the retail workforce.
It is possible that some of these, if not all, will be addressed by the Trump administration in the new year. However, retailers should expect to continue seeing action at the state and local levels on several workforce issues, including paid leave, minimum wage and proposals that would impact scheduling and part-time employment.
Swipe fee reform
The new leadership dynamic in Washington virtually guarantees that Congress will act on financial regulatory reform. Specifically, action to overhaul the Dodd-Frank Wall Street Reform Act of 2010 (DFA), was initiated this year and is expected to be renewed at the start of next year.
Contained within the Dodd-Frank Act were reforms that brought competition to the debit card market. Commonly known as the Durbin Amendment, a repeal of these reforms is a priority of big banks. These reforms have resulted in consumer savings and job creation, and retailers, small and large, will fight aggressively to defend them from any repeal effort.
Transportation
Trump, as well as Congressional leaders on both sides of the aisle, agree on the need for infrastructure investment, particularly at America’s ports.
Currently, the discussion of infrastructure investment focuses around funding. Of note to retailers, Trump’s proposal relies heavily on investments from the private sector. However, the implementation of this proposal may ultimately rely on comprehensive tax reform as a gateway to offering tax incentives for these investments.
A long-term investment in infrastructure is needed to address the constant challenges of congestion at our country’s ports that continue to stymie the supply chain, and there is hope that a renewed push toward action on this issue could be successful under the new Congress.
Jennifer Safavian is executive VP of government affairs for the Retail Industry Leaders Association (RILA).