Welcome to the 2013 edition of the tax-free weekend gimmick. Is it a net win for the state and for consumers? I wish I could find a definitive answer to either.
The state will lose about $23M is sales tax revenue, and much of this is needless. Much is for stuff many people will buy anyway and not think about the sales tax. In past years I have taken advantage of it, but it was just delaying purchases to hit that date. One furniture store even wrote up the sales slip a week or two ahead of time, dating it for the magic weekend. I didn't even have to come back to the store to complete the purchase.
But will the "extra" economic activity make up for that? That includes items like income tax from added staff and hungry shoppers stopping at restaurants. I don't think it'll change what I do? How about you?
Are retailers manipulating prices so that consumers just think they're getting a good deal, pocketing more profits? Personally, I don't especially trust BestBuy or Target or Home Depot. Do you?
I wonder that perhaps this is just a mechanism to feed to the anti-tax zealots, giving an emotional outlet with little harm to the state. Could this be letting them think they're getting their chance to stick it to big gummint, with minor impact? I'm not sure the legislature is clever enough to think like that. If they were, my respect for them would go up. Perhaps I read too many conspiracy novels.
But there are many such zealots who would drive to Nashua to save $22 in sales tax in "Tax-free New Hampshire", as ads say. I'd rather have the 2 hours of my weekend (and $8 in gas) than do that.
Mass Legislature
I do think the legislature is misguided and unimaginative on many aspects of their tax approach in other areas too. Taxing software sales? Bad, bad. Business are right to jump on that in the past week. And implementing a feeble 3-cent gasoline tax increase, where the value of the gas tax has steadily declined by about half since it was last raised in 1990? Right, it's un-American to opposed anything that inhibits driving. Republican mouthpieces love opposing stuff like that.Other Ideas
What else could we do?- How about reduce the sales tax, even by a quarter of a percent.
- Would targeted, but longer tax holidays to encourage spending in areas economic policy experts think should be stimulate? For example, would what would eliminating the sales tax on building materials for a month do?
- How about reviewing what is exempt from sales tax every couple years, then base decisions both on affects on consumers and the affected industries.
- Tax online retailers. Why should they be special? We might be able to reduce the rate and keep the same revenue.
