MuniLand

WMT had the worst sales start to a month in seven years as payroll-tax increases hit shoppers – @bloombergnews mobile.bloomberg.com/news/2013-02-1…

— Lauren Lyster (@LaurenLyster) February 15, 2013

We don’t need to wait around for the macro data to tell us that the economy is slowing. The signals are coming loud and clear from the micro data. Bloomberg reports:

Wal-Mart Stores Inc. had the worst sales start to a month in seven years as payroll-tax increases hit shoppers already battling a slow economy, according to internal e-mails obtained by Bloomberg News.

“In case you haven’t seen a sales report these days, February MTD sales are a total disaster,” Jerry Murray, Wal-Mart’s vice president of finance and logistics, said in a Feb. 12 e-mail to other executives, referring to month-to-date sales. “The worst start to a month I have seen in my ~7 years with the company.”

Reuters reports on state sales tax revenues, which are a key gauge of consumption:

There is a growing cadre of Republican governors who are considering lowering or eliminating income taxes in their states (Louisiana, Nebraska, Kansas, Oklahoma, Missouri, and Indiana). The revenue they would forego by eliminating the income tax would be made up by increasing state sales taxes. There are several strong arguments in favor of this change for the way it would increase personal savings and lower tax rates on small business owners who usually run their business expenses and profits through their own income statements. So by eliminating state income taxes, more profits are left with small businesses to possibly expand.

But there is also an overlooked ecological advantage that comes from increasing sales taxes. It reduces consumption, because people pay higher prices for goods and services. Reduced consumption leads to less ecological damage. For example, since the economy has remained weak since 2008, gasoline consumption has declined and remained substantially below its peak in 2007. This has created an economic drag, but has also been an enormous boon in reducing air emissions.

America is crazy about consumption. Our houses, closets and garages are stuffed with junk. An important national sport at a certain time every year is to go out and shop for more. The Center for Sustainable Systems at the University of Michigan has some facts on U.S material consumption:

States on average derive about 49 percent of their revenue from sales taxes, so holiday shopping results are important for state treasuries. Unfortunately, the early read on holiday retail sales looks pretty bleak. Reuters reports (emphasis mine):

As the U.S. holiday season winds down, retailers are left to hope that post-Christmas sales can help salvage their worst performance since 2008, preliminary data showed.

Holiday-related sales rose 0.7 percent from October 28 through December 24, compared with a 2 percent increase last year, according to data from MasterCard Advisors SpendingPulse.