sales tax holidays

As a business owner, I guess I’m supposed to be in favor of this "tax holiday". But after seeing the twentieth Bernie’s ad of the day interrupt the Olympics, I’ve had enough of it.

What are people going to do with a tax holiday? Food and clothing aren’t taxable, unless you eat out and that’s not included in the holiday anyway. Books and other small ticket items don’t really cost much less without the tax. If you want to save any real money, you have to spend quite a bit - a $200 purchase will save you $10 - and, besides, stuff gets put on sale for more than 5% off all the time, at the discretion of the business that wants to increase sales or clear out merchandise.

The only stuff that rarely goes on sale and that would make sense to buy in a sale like this is big-ticket, low margin stuff like furniture and electronics. So it seems to me that the most likely thing to happen is that people will impulse-buy big-ticket stuff in order to save a few points on it. Chances are, in a lot of cases that type of purchase will end up on a credit card and may end up being paid over time at substantially greater cost to the buyer than the 5% that was saved (at 18%, if it takes 4 months to pay it’s a net loss) and further increasing the credit card debt that is a large part of the economic mess we’re in.

The winners are Mastercard, Visa, and the big box stores. The losers, as I see it, pretty much everyone else. Unless your biggest purchase of the day was $7.25 at the Red Fire farm stand for some yummy blueberries and summer squash :-)