Another sales tax-free weekend in Massachusetts is history.
The state’s consumers supposedly saved $21 million. Retailers got a big bounce — from $100 million in sales on a typically sleepy, humid, summer weekend to an estimated $500 million.
Yes, Gov. Deval Patrick and our conscientious, hard-working legislators have given us a break and the economy a boost. It’s a win, win, right? A big, fat, deal.
Actually, it’s big, fat nothing.
The sales tax holiday is nothing more than a gimmick. It doesn’t save hard-pressed consumers any more than it “deprives” the state of supposedly desperately needed revenue. It is a diversion from the reality that Massachusetts residents are overtaxed every day of the year. This just lowers that burden by an insignificant amount for two of those 365 days — a big, fat nothing.
As Robert Bradford, former head of the North Shore Chamber of Commerce has observed, the tax holiday might have qualified as an actual break from 2004 to 2008, when the sales tax was 5 percent.
But in 2009, the Legislature hiked it 25 percent — to 6.25 percent. If they really wanted to give us a break and help the economy, they would announce a sales tax holiday lasting three months — 25 percent of the year – as former Cape Ann Chamber of Commerce chief Bob Hastings has noted in the past. And even that would only get us back to where we were in 2008.
Giving people a tax holiday after gouging them with higher taxes is like taking a freezer full of steak from people and then giving them a “free” hamburger. It’s like giving a convict a two-day furlough and expecting him to forget that he’s living in a cell the rest of the year.
Even Gov. Patrick has called it a gimmick in the past, although in his case that’s all about him whining about how it will make it more difficult for government to be large enough to support the ever-expanding welfare state.
That $21 million amounts to less than one-100th of a percent of a state budget that is north of $30 billion. That’s not even a rounding error, much less a curb on the insatiable growth of out state government.
But the problems with it go beyond that. It gives New Hampshire Gov. John Lynch another chance to needle his neighbor to the south, and promote the fact that his state has a sales tax holiday not only every weekend of the year, but every day of the year.
It distorts economic activity, much the way the absurd “Cash for Clunkers” program did for the auto industry. It crammed six months or more of car purchases into a couple of months. In this case, people who would buy things over the next month or so, do it on the two-day “holiday.”
It is, like any government program, filled with exemptions. It’s only good for purchases up to $2,500. It doesn’t apply to motor vehicles, boats, meals, gas, and tobacco products. It doesn’t apply to corporations.
Yes, many of you may have bought a new computer or a TV, and might have saved 50 bucks or so this past weekend. But over the long haul, saving that $50 is a big, fat nothing.
The state desperately needs tax reform — real, permanent tax reform. And hopefully, it will include a scaling back of the 6.25 percent sales tax that socks consumers and hurts businesses 363 days a year.
This sales tax “holiday” gimmick lets the governor and legislators pretend that they care about taxpayers, and distracts them from that real reform need.
That, indeed, makes it even worse than nothing.
And the fact that we keep letting them get away with it is worst of all.