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David French, senior vice president for government relations at the National Retail Federation, said his group also wants the payroll tax cut extension. But, he added, “It’s probably not, in the long run, good policy. It’s running the risk of putting the Social Security trust fund in jeopardy.”
French also said retailers have found it difficult to measure the “true benefit” of the payroll tax break. While it does put cash back into consumers’ pockets, “for much of the year, high energy costs eroded that,” he said.
The problem with short-term tax relief, he noted, is that “now we’re looking at a cliff” if it expires.
One tax lobbyist, who noted that business interests don’t want to be used in the bitter payroll tax fight, said K Street has higher tax priorities, including extending the popular tax credits for companies doing research and development. These corporate stakeholders worry that the payroll tax debate may take away attention from those higher priorities.
“There has been some difficulty gaining traction on those,” the lobbyist said. “I just don’t know what is viable at this point.”