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Economy / Taxes

“Temporary Political Stunts”

By Sarah Brodsky on Sep 16, 2009

That’s the Tax Foundation’s assessment of sales tax holidays. While I haven’t read the entire study yet, this sentence in the summary confirms my intuition about the holidays’ effects:

Sales tax holidays do not promote economic growth or significantly increase consumer purchases; the evidence shows that they simply shift the timing of purchases.

The study also delves into the issue of politicians arbitrarily applying holidays to some products but not others. I didn’t know that Virginia has a sales tax holiday for duct tape that excludes masking tape. It almost makes our back-to-school sales tax holiday seem reasonable by comparison — at least Missouri doesn’t favor pencils at the expense of erasable pens.

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Sarah Brodsky

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