Retail Report

'As retail goes, so goes America,' VP Pence tells a room full of retailers

Key Points
  • On Tuesday, Pence took the opportunity to talk about President Trump's latest efforts to repeal and replace Obamacare.
  • This year's Retail Advocates Summit, hosted by the NRF, was focused on the importance of tax reform for retailers and their employees.
Vice President Mike Pence
Brian Snyder | Reuters

The best days for American retailers are ahead, Vice President Mike Pence said Tuesday at a summit hosted by the National Retail Federation.

"I promise you that," Pence told the crowd.

More than 200 retail representatives from across the country, including small-business retailers, national executives and state officials, attended the Retail Advocates Summit in Washington, D.C.

This year's convention focused on the importance of tax reform for retailers and their employees.

"As retail goes, so goes America," Pence said. "This president is going to work with this Congress, this year, and pass the largest tax cuts since the days of Ronald Reagan." The current tax code creates "huge barriers" to creating more retail jobs, he added.

"The internal revenue code is [currently] two times as long as the Bible, with no good news," he joked.

The GOP has promised to simplify the tax code, making the language "fairer" and "simpler."

On Tuesday, Pence took the opportunity to speak about Trump's latest efforts to repeal and replace Obamacare. He opened the event by detailing Republicans' latest push in health care — probably not the conversation many retailers were expecting to have.

Lately, Republicans have been facing heated pressure from big businesses, including retailers, to move on from health-care legislation to passing some sort of tax reform.

Many executives have stressed the importance of securing a major reduction in the corporate tax rate, which currently stands at 35 percent. On Tuesday, Pence suggested to the retailers a cut to 15 percent.

Though both White House and Republican leaders have proposed steep cuts, analysts say divisions within the GOP and the stalemate on health care have diminished the prospect of aggressive action.

Retail executives in particular remain concerned about one of House Speaker Paul Ryan's proposals: a border adjustment tax, also referred to as BAT.

But Pence didn't mention BAT — a definite elephant in the room — during his Tuesday speech.

The consumer-facing industry has been leading the fight against the proposed measure, which would tax imports into the United States.

In May, for example, a group of retail CEOs met with Treasury Secretary Steven Mnuchin to express frustration regarding the import tax, with many arguing this plan would cause companies to hike prices and pass the burden on to consumers. Present at the May meeting were executives from Coca-Cola, Dollar General and J.C. Penney.

The estate tax, however, did come under fire. "[U]nder President Trump we will repeal the death tax once and for all," Pence said, to a heavy round of applause. This is important to retailers because some closely held businesses are subject to the estate tax.

"Less regulation, lower taxes, better infrastructure," he said. The president wants retailers to be able to compete on a "level playing field" with companies all across the world, he said.

[We] "will put retailers back on the path to jobs and growth and back to competitiveness."

—CNBC's Ylan Mui contributed to this report.

Read more details on Pence's Tuesday speech.