Massachusetts Democratic Governor Deval Patrick is expected to sign legislation soon that would make The Bay State the 18th state in the Union to become part of the back-to-school tax holiday this year. This has become the latest trend in the United States in a bid to jumpstart the economy.
So far this year, 17 other states have initiated tax holidays and most states will begin their own tax holiday Saturday for sales on clothing, books and various school supplies. Seven states, meanwhile, have expanded the tax holiday to include pre-hurricane-season sales for things like building and safety equipment.
Although retailers in Massachusetts will only have a small amount of time to prepare, it has been reported that they’re gearing up and getting ready for the influx of shoppers because of the tax holiday. The state’s holiday will include nearly everything, though, excluding restaurant meals, tobacco, vehicles and motorboats.
“We’re not that concerned that people won’t be aware of it, even though the holiday was just passed yesterday,” said Bill Rennie, vice president of the Retailers Association of Massachusetts, in an interview with Stateline. “We had some indication they (the legislature) would do it, so retailers are prepared with advertising. They can hit ‘send’ and get the word out.”
Joseph Henchman, author of the Tax Foundation report “Sales Tax Holidays: Politically Expedient but Poor Tax Policy,” said, ahead of Louisiana’s tax holiday, that it’s a great concept but they don’t rather accomplish much. He pegged the question: if they’re good for a few days of the year then why not shift it for all 365 days?
In the end, Henchman called the tax holidays nothing but “gimmicks.”
“If a state has to offer a ‘holiday’ from its tax system, it’s a sign that there’s a problem with the system itself. If politicians want to save money for consumers, then they should cut the sales tax rate year-round,” Henchman told Daily World. “Political gimmicks like sales tax holidays distract policymakers and taxpayers from genuine, permanent tax relief.
Lawmakers noted, however, that the Tax Foundation should get mixed up with tax holidays and tax reforms because they are two different topics entirely. State Representative Joel Robideaux explained that constituents and businesses enjoy the tax holiday and said that the government’s role is to provide benefits to residents.
Over in Oklahoma, retailers will be required to participate in the tax holiday, including state and local taxes. Shoppers will not be forced to fork over extra dollars in taxes for items under $100 from Aug. 2 until midnight Sunday, Aug. 4. To accommodate shoppers, many stores and malls have extended their operating hours.
Right now, consumers are being pummeled with taxes. Whether it’s a sales tax, alcohol tax, tobacco tax, income tax, gas tax or property tax, Americans can’t escape taxes and are forced to dole out more money on everything. This is why some libertarians are calling for one general consumption tax called the FairTax. The national sales tax would replace all federal income taxes, payroll taxes, gift taxes and estate taxes.
Although many libertarians claim it would be a better alternative to today’s tax system, others make the case that the income tax should be replaced with nothing at all, including retired Texas Republican Congressman Ron Paul.
“As you may know, it’s not easy for me to advocate any new tax! However, I certainly think a sales tax is better than an income tax – PROVIDED the income tax is truly eliminated. I would hate to see America end up with both a national sales tax and an income tax, much like socialist European countries,” Dr. Paul wrote to a constituent in 2006.