Last week, S.2320, a bill that would create Universal Savings Accounts in the federal tax code, was referred to the Senate Finance Committee. The bill, sponsored by Senator Jeff Flake and Representative Dave Brat, would...
- Bloomberg Highlights Tax Foundation Sales Tax Holiday Spe...
Bloomberg Highlights Tax Foundation Sales Tax Holiday Special Report
By Esme E. Deprez
Illinois, Florida and Maryland will offer sales-tax holidays for back-to-school shopping this year, bringing the number of states doing so to 18, even as officials cope with record budget deficits.
The Tax Foundation said in a report today that states implementing tax holidays in 2010 may reach a record-high of 19 if Massachusetts approves a proposed two-day exemption in August for merchandise costing less than $2,500. Sixteen states had sales-tax holidays last year and 17 offered them in 2008, the foundation said.
The tax moratoriums don't prop up economic growth or significantly boost consumption, according to the Washington- based research group. Instead, they alter the timing of purchases.
"Sales-tax holidays are gimmicks designed to win political points for lawmakers," Mark Robyn, who co-wrote the report with Joseph Henchman and Micah Cohen, said in a statement. "If lawmakers want to cut taxes, they should do so in a way that benefits everyone, no matter what they purchase or when they purchase it. Unfortunately, sales-tax holidays only distract from genuine, permanent tax relief."
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