Payroll tax hike doesn't hurt retailers; January sales up 5.1%

American consumers didn't let the payroll tax hike deter them from shopping in January.

Despite warnings from some corners of the retail and economic sectors that the expiration of the payroll tax cuts would hurt business sales, retail sales were up last month.

In a new survey by the International Council of Shopping Centers, the retail trade group stated that same store sales were up by an average of 5.1 percent, and is the highest uptick in sales since August's rise of 6 percent.

The report is not comprehensive for all stores across the country, but offers an overview of the retail industry, which contributes $2.4 trillion to the U.S. economy.

The rise in the payroll tax was the result of the fiscal cliff negotiations. The payroll tax, which funds Social Security and Medicare, had been temporarily cut by 2 percent over the past two years. When it was not extended, it reverted to its normal rate, which can cost a $50,000 per year worker about $1,000 in additional taxes.

 

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