A special report by the foundation concludes that such holidays, which 18 states have decreed this year, do little to stimulate the economy as consumers simply time their purchases to take advantage of the temporary tax break.
“Political gimmicks like sales tax holidays distract policymakers and taxpayers from genuine, permanent tax relief,” the report states. “If a state must offer a ‘holiday’ from its tax system, it is a sign that the state’s tax system is uncompetitive. If policymakers want to save money for consumers, then they should cut the sales tax rate year-round.”
Fat chance of that, as long as voters keep electing people who consider every nickel saved by taxpayers a nickel lost by the state. The Legislature has resisted calls even to make the sales tax holiday permanent despite the obvious benefits for shoppers and merchants.
We agree that the holiday is no substitute for real reform. But we also believe that we’re all better off with $21 million in consumers’ pockets rather than in state coffers.
So get out and shop this weekend. The pity is that the Bay State’s short-sighted and destructive tax policies have left so few local retail outlets to patronize.