Editorial: The Feel-good Sales Tax Holiday

“We do it, frankly, not because it’s particularly fiscally prudent, but because it’s popular.”

That’s Gov. Deval Patrick explaining what has become the annual sales tax holiday, this year’s scheduled for the weekend of Aug. 13-14.

In other words: it makes no real sense, but a lot of people are fooled into thinking it’s a good idea, so let’s do it again.

This is what happens when our elected leaders think they have to tell us what we want to hear, instead of what we need to hear.

The governor and the Legislature just recently put the finishing touches on a state budget that forces deep spending cuts to close a $1.9 billion gap between revenues and expenses. That means cuts to programs that help low-income children, including a clothing allowance for poor children from $150 to $40, and cuts to public higher education, so college students get to pay more in tuition.

Suspending the 6.25 percent state sales tax for a summer weekend on items that cost up to $2,500 means around $20 million to $25 million in lost state revenues, money that could be used to keep cops on the street, teachers in the classroom, and prevent the Red Line from breaking down on an all-too-frequent basis. All so that consumers can put off purchasing big-ticket items that they would have bought anyway , and retailers can suspend store discounts for those two days and jack prices up, knowing it will be a high-turnout weekend.

As a matter of tax fairness, the sales tax holiday is a bigger benefit to those with the disposable income to burn. A more forward-thinking tax policy would consider ways to help low-income taxpayers, who pay a higher share of their income on the sales tax than high-income earners.

Even the Tax Foundation, a conservative think tank that is critical of taxes in general, knocks the concept of the sales tax holiday as a gimmick that that does not promote economic growth. Understanding that is not a matter of a liberal or conservative perspective, it’s a matter of not being fooled into thinking our politicians are doing us a favor when they manipulate our shopping schedules from one weekend to another.

More forward-thinking legislators would be working on the inevitable
elimination of the year-round sales tax holiday enjoyed by Internet
merchants such as Amazon.com, at the expense of brick-and-mortar
stores that are located and contribute to the tax base right here in
Massachusetts.

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