Why is Wal-Mart worried? Payroll tax could cut consumer spending.

[mystery-ak]

http://www.csmonitor.com/layout/set/print/Business/2013/0222/Why-is-Wal-Mart-worried-Payroll-tax-could-cut-consumer-spending


The Christian Science Monitor - CSMonitor.com
Why is Wal-Mart worried? Payroll tax could cut consumer spending.

Recent reports forecast lower spending for this year, anticipating that the restored payroll tax will impact consumers' wallets, especially low-income earners. Wal-Mart is adjusting its strategy.


By Husna Haq, Correspondent / February 22, 2013 at 4:45 pm EST
New York

Retailers are preparing for a triple whammy as the restoration of the payroll tax, surging gas prices, and stagnant employment and wages take a bite out of consumers’ disposable income, leaving them with less cash to spend on clothing, groceries, and eating out.

As a result, more than three years after the recession officially ended, American consumers might be preparing to downshift again, if only slightly, with low-income consumers hit the hardest. Sensing consumer trepidation, retailers are scrambling to adjust.

Retailers, restaurants, and consumer goods companies like Wal-Mart are lowering sales forecasts and adjusting marketing campaigns ahead of expectations that consumers will slash spending, the Wall Street Journal reports.

In a survey released Thursday, the National Retail Federation (NRF) said some 46 percent of consumers plan to spend less as a result of the payroll tax increase. One-third said they will reduce dining out and one-quarter will spend less on “little luxuries,” like manicures and trips to coffee shops.

“A smaller paycheck due to the fiscal cliff deal early last month, higher gas prices, low consumer confidence and ongoing uncertainty about our nation’s fiscal health is negatively impacting consumers and businesses across the country,” Matthew Shay, president and CEO of the NRF, said in a statement.

Originally enacted in December 2010 to help taxpayers weather the recession and to spur economic activity, the payroll tax cut expired Jan. 1 of this year. The restoration of the tax effectively raised the rate from 4.2 percent in 2012 to 6.2 percent in 2013, shaving 2 percent from consumers’ take-home pay.

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[Oceander]

Yeah, but it's all Bush's fault and at least we have those wonderful democrats in office who will save us from Bush - 5 years after Bush left office.

My God but Americans are a fantastically stupid group of people.

[Relic]

My God but Americans are a fantastically stupid group of people.

This is a toxic environment, and this country is finished. I'm a veteran, and would consider myself patriotic. However, I share your opinion of the American public. I frequently use the word stupid because it conveys not only that Americans aren't bright, but it conveys my contempt for them. I feel so disconnected from those idiots that inhabit this country that I barely feel American.

It really is over.

[Oceander]

This is a toxic environment, and this country is finished. I'm a veteran, and would consider myself patriotic. However, I share your opinion of the American public. I frequently use the word stupid because it conveys not only that Americans aren't bright, but it conveys my contempt for them. I feel so disconnected from those idiots that inhabit this country that I barely feel American.

It really is over.

I fear we are living through times that mirror the last century B.C., and are only at most a decade away from events that will mirror those of 44 B.C., when Caesar crowned himself perpetual dictator.  I think the odds of Obama playing the role of Caesar are low - but not trivial - but if the next President is also a leftist democrat, then I think we'll be facing our own Caesar.

Obama may, however, form the core of our own Cataline conspiracy.