hgazette.com, Haverhill, MA


August 9, 2012

Editorial: To prosper, state needs real sales tax refo rm

This weekend is the one to buy that new refrigerator, washer-dryer, flat screen TV or sofa.

Aug. 11-12 is a sales tax holiday weekend in Massachusetts.

You won’t have to pay the usual 6.25 percent sales tax on most purchases.

That covers a lot of merchandise. In the Bay State, virtually everything is subject to the sales tax, except food and clothing. And even clothing is taxed if the item costs more than $175. So this weekend is also a good one to buy a wedding gown or expensive suit.

Making it an even better shopping weekend is that many Massachusetts retailers will be offering deals tied to the sales tax holiday.

Last year, shoppers saved an estimated $21 million during the two-day tax holiday, according to the state Department of Revenue. That means retailers took in more than $330 million that weekend.

That’s something to celebrate.

But the sales tax holiday is also occasion to think about just how dysfunctional and destructive the Bay State’s tax system is.

The first sales tax holiday was a one-day event in 2004. It was passed as part of an economic stimulus package designed to give Bay Staters a reason to spend a little money in a down economy — or at least spend it here rather than in New Hampshire, where every weekend is sales tax-free.

The Legislature has decreed a sales tax holiday or weekend every year since. Except that is, in 2009, when the solons not only decided the state couldn’t “afford” to lose the money but also raised the tax by 25 percent — from 5 cents on the dollar to 6.25 cents. Thanks a lot, solons.

Despite the savings for taxpayers, the Tax Foundation, a nonprofit, nonpartisan tax research organization based in Washington, D.C. , takes a dim view of sales tax holidays.

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