Wal-Mart is attributing a drop in consumer spending to the looming individual mandate to buy health insurance under the Affordable Care Act.
Starting on Jan. 1, most Americans will be required to carry health insurance. Those who don’t will be forced to pay a penalty that starts at $95 a year, or 1 percent of taxable income, whichever is greater. Penalties will grow to $695 or 2.5 percent of taxable by 2016.
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Wal-Mart executives believe that this burden is certainly weighing on its customers, according to the Wall Street Journal.
Wal-Mart, which forecast continued gloominess through year-end, told analysts it would watch to see if the federal health-care law would take yet another chunk out of customers' pocketbooks.
"While it is not coming through in customer research, we do know that some of our customers are concerned about the impact of the Affordable Care Act," Carol Schumacher, vice president of investor relations, told analysts on Thursday. "For many of our customers, having to afford health care and insurance may be another line item in their personal budget that they may not have had to cover previously." […]
Bill Simon, president of Wal-Mart U.S., hinted at an investor conference last month that the process and cost of signing up for care could be a further weight on customers who already were weathering the 2% hit to their paychecks from the expiration of the payroll tax cut.
Wal-Mart has been a close ally of President Barack Obama during his years in office. The company was a founding member of the Obama-friendly business group Business Forward and has partnered with the White House for multiple programs.
Obama also hired a Wal-mart executive to direct his Office of Management and Budget.