Sales Tax Holidays Are ‘Gimmicks’?
Sales tax holidays that exempt certain
items from state and sometimes local sales taxes will be held in 17 states this
year, with supporters continuing to tout their economic benefits.
But a new report from the Tax Foundation argues that the holidays are
“politically expedient but poor tax policy.”
Tax holidays often exempt back-to-school supplies, clothing, computers, and
hurricane preparedness items, and politicians and other backers claim they boost
sales, create jobs, and benefit lower-income Americans.
But the Tax Foundation report states:
“Political gimmicks like sales tax holidays distract policymakers and taxpayers
from genuine, permanent tax relief. 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.”