Oklahoma Sen. Gumm: We Accept Your Invitation to Speak

The Tulsa World asked Oklahoma sales tax holiday supporter Sen. Jay Paul Gumm (D) what he thought of our report debunking common claims about sales tax holidays. His response? A challenge:

“I would invite this group to speak with the thousands of Oklahoma families who saved millions of dollars during the back-to-school sales-tax holiday,” [Gumm] said. “Perhaps then they might have a real-world view of what this policy means to real people and the budgets of real families.”

Gumm does not believe that Oklahoma retailers increased prices for the sales-tax holiday.

“In most communities, retailers run specials to coincide with the sales-tax holiday, providing even greater savings for families,” he said. “It also helps level the playing field for the middle- and low-income families by reducing the most regressive tax at one of the times of year when families spend the most.”

On the latter point, our report looks at every published analysis of prices around sales tax holidays (including one done by a news reporter in North Carolina) and found that at least some prices are higher during holidays. That makes sense, since supply is constrained but demand is sharply up as everyone crowds the stores at one time. Recessions blunt the price increases, however.

As for Sen. Gumm’s invitation for us to talk to his constituents about how sales tax holidays affect them, we accept. I’m sending this to the Senator today:

August 31, 2009

Dear Senator Gumm:

On behalf of the Tax Foundation, I would like to accept your invitation to participate in a forum with you and your constituents on the benefits and costs of sales tax holidays. I share your determination to provide tax savings to the families of Oklahoma, and I believe such a forum would be an excellent opportunity to explain how sales tax holidays fail to achieve that.

I look forward to details about location and time.

Yours Very Truly,

Joseph Henchman
Director of State Projects, Tax Foundation

Meanwhile, the Tulsa World followed up today with an editorial, calling sales tax holidays a political gimmick that doesn’t spur the economy, albeit a harmless one. Certainly they can be less harmful than other disastrous tax policies. But the costs and distortions imposed by sales tax holidays are real and harmful.

Past open letters to Oklahoma officials here, here, and here.