Tax Free Week Ends A Distracion : Consumption Only Shifted, Reform Needed

It appears the Tax Holiday is a shell game and distraction from the real solution which is tax reform. Fooling the public has become a game for the politicians and how it works every time it's tried.

Just look how many times democrats are elected and reelected just by telling the voters what they want to hear and then do just the opposite, then blame the opposition when is all falls apart. The tax holiday doesn't work to relieve the burden of high taxes, it just shifts the consumption from one place to another.

They, the voters, are lied to over and over again, but it doesn't seem to matter, the democrats are allowed to shout, 'oh no, look over there, see what those bad people are doing' all the while they are busily sticking it to the voters, the taxpayers.

Being screwed feels better when you agree to being screwed, when you actually and knowing vote to  be screwed. 

Tax-Free Weekends: Good Policy?
Source: Kathy McCabe and Laura Gomez, "Mass. shoppers take advantage of tax-free shopping," Boston Globe, August 16, 2014; Taryn Luna, "Tax holiday set for this weekend," Boston Globe, August 13, 2014; Joseph Henchman and Liz Malm, "Sales Tax Holidays: Politically Expedient but Poor Tax Policy 2014," Tax Foundation, July 31, 2014.

August 19, 2014

Over the weekend, Massachusetts offered shoppers a tax-free holiday -- purchases under $2,500, with some exceptions, were free of the state's 6.25 percent sales tax. According to the Boston Globe, shoppers tend to spend close to $500 million during the sales tax holiday. A number of retailers collect 2 percent of their yearly sales during the weekend, with some earning up to 10 percent.

Massachusetts is one of 17 states that have held, or will hold, a sales tax holiday in 2014. But while the holidays draw shoppers into stores, are they good tax policy? Joseph Henchman and Liz Malm of the Tax Foundation argue that tax-free weekends create distortions without generating much of an economic boost:

• The sales tax break does not generate new spending; it merely shifts it, encouraging consumers to shop for goods that they would already purchase during the exemption period.
• The tax-free weekend generally applies only to certain products; often, the products exempted from tax are the product of political lobbying. These distinctions distort spending.
• Tax codes are complex, and creating a sales tax exemption can be burdensome for small businesses, who have to focus limited resources on complying with the holiday.

Ultimately, write Henchman and Malm, sales tax holidays can be a distraction from real, comprehensive tax reform that could yield benefits for consumers without creating economic distortions.