Retail is the cornerstone of the American economy, employing more than one in four U.S. workers — more than 55 million people across all 50 states — and contributing $5.3 trillion annually to GDP. These aren’t just numbers; they represent the jobs, communities, and opportunities supported by a dynamic industry that thrives when policies create certainty and foster growth.

The 2017 Tax Cuts and Jobs Act (TCJA) was a game-changer for American retail and the economy at large. By reducing the corporate tax rate from an uncompetitive 35% — one of the highest in the developed world — to 21%, the TCJA unleashed a wave of American investment and innovation across industries. This reform created jobs, increased wages, and positioned the U.S. as a leader in global competitiveness.

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For the retail sector, the impact was transformative. Companies reinvested in U.S. operations, expanded partnerships with small businesses, strengthened supply chains, and offered higher wages and more benefits to employees. These investments were not just good for business — they were a boon for American workers and their families.

Economic data reinforces this success story. Since the TCJA’s passage, U.S. growth has outpaced other G7 and advanced economies. Corporate tax receipts have soared well above Congressional Budget Office projections, reaching record highs in 2024 — 79% higher than in 2017 and 26% higher than originally expected. The lower rate proves that pro-growth tax policy doesn’t just stimulate the economy. It also strengthens federal revenue streams.

Despite this success, retail faces headwinds that demand immediate attention. Tariffs on imported goods continue to place undue pressure on the industry, increasing costs for businesses and prices for consumers. These tariffs act as a hidden tax, undermining the very competitiveness the TCJA was designed to bolster.

Retailers are not alone in feeling the strain. Tariffs ripple across the economy, inflating costs and complicating supply chains at a time when resilience and affordability are critical. While addressing foreign trade barriers is essential, so is the need to extend and expand the TCJA to ensure continued growth.

Proposals to raise the corporate tax rate — either outright or through backdoor measures — pose a serious threat to this progress. Increasing the rate to 25%, for example, would result in a combined federal-state rate nearing 30%, almost double China’s 15% rate for key sectors. Such a move would discourage investment in the U.S., reduce economic activity and jeopardize American jobs.

Studies confirm that higher corporate taxes hurt working families most. They lead to lower wages, higher consumer prices and diminished retirement savings. Retailers already operate on slim margins and are especially vulnerable. A higher rate would force many businesses to scale back investments, limit hiring and even close locations — costing jobs in communities nationwide.

Congress has a clear choice: Build on the success of the TCJA or risk eroding the economic gains achieved over the past six years. The National Retail Federation strongly urges lawmakers to act swiftly on a tax package that preserves the competitive 21% corporate tax rate and provides long-term certainty for both businesses and consumers alike.

Retailers remain committed to driving growth, creating jobs and serving communities. But to continue delivering on this promise, we need policies that prioritize competitiveness and stability. By extending and expanding the TCJA, Congress can ensure that the U.S. economy remains a leader on the global stage and that the retail industry continues to be a cornerstone of American prosperity.

Ashley Wilson is Vice President, Tax Policy, National Retail Federation