About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline
LOG IN
LOG IN

1 Joseph Henchman & Scott Drenkard, Sales Tax Holidays: Politically Expedient but Poor Tax Policy 2017 1 (2017)

handle is hein.taxfoundation/slaxhod0001 and id is 1 raw text is: SPECIAL REPORT No. 236 Jul. 2017 Sales Tax Holidays: Politically Expedient but Poor Tax Policy 2017 Joseph Henchman Executive Vice President Scott Drenkard Director of State Projects The Tax Foundation is the nation's leading independent tax policy research organization. Since 1937, our research, analysis, and experts have informed smarter tax policy at the federal, state, and local levels. We are a 501(c)(3) non-profit organization. @2017 Tax Foundation Distributed under Creative Commons CC-BY NC 4.0 Editor, Rachel Shuster Designer, Dan Carvajal Tax Foundation 1325 G Street, NW, Suite 950 Washington, DC 20005 Key Findings * 16 states will hold a sales tax holiday in 2017, down from a peak of 19 states in 2010, and down from 17 states last year. Georgia dropped its annual sales tax holiday and Massachusetts policymakers blocked a proposal to implement an annual sales tax holiday. Sales tax holidays do not promote economic growth or significantly increase consumer purchases; the evidence (including a new 2017 study by Federal Reserve researchers) shows that they simply shift the timing of purchases. Some retailers raise prices during the holiday, reducing consumer savings. * Sales tax holidays create complexities for tax code compliance, efficient labor allocation, and inventory management. However, free advertising for what is effectively a paltry 4 to 7 percent discount leads many larger businesses to lobby for the holidays. * Most sales tax holidays involve politicians picking products and industries to favor with exemptions, arbitrarily discriminating among products and across time, and distorting consumer decisions. * While sales taxes are somewhat regressive, this does not make sales tax holidays an effective tool for providing relief to low-income individuals. In order to give a small amount of tax savings to those with lower incomes, holidays give a large amount of savings to higher-income groups as well. * Political gimmicks like sales tax holidays distract policymakers and taxpayers from genuine, permanent tax relief. If a state must offer a holiday from its tax system, it is an implicit recognition that the state's tax system is uncompetitive. If policymakers want to save money for consumers, then they should cut the sales tax rate year-round. 202.464.6200 taxfoundation.org

What Is HeinOnline?

HeinOnline is a subscription-based resource containing thousands of academic and legal journals from inception; complete coverage of government documents such as U.S. Statutes at Large, U.S. Code, Federal Register, Code of Federal Regulations, U.S. Reports, and much more. Documents are image-based, fully searchable PDFs with the authority of print combined with the accessibility of a user-friendly and powerful database. For more information, request a quote or trial for your organization below.



Contact us for annual subscription options:

Contact Us

Already a HeinOnline Subscriber?

Log In

profiles profiles most