Our View of the Times – August 12

On August 12, 2015, in Latest News, by The Somerville Times

powderhouse_viewThe annual two-day sales tax holiday was once again approved by the State Senate last week, in spite of opposition by a group of dissenting legislators who feel that the measure actually does more harm than good. Among them were our own Rep. Christine Barber, Rep. Denise Provost and Senator Patricia Jehlen.

Critics of the program believe that claims of an overall boost to the economy statewide are mostly exaggerated. They say that shoppers tend to wait for the “holiday” in order to bypass paying the sales tax, which actually lowers revenues over the long term.

Citing that in 2014 alone approximately $25M in revenue was lost due to the holiday, its opponents argue that these monies could be used for important programs that are in need of additional funding.

In a report issued by these opponents last week, it was noted that the Massachusetts Department of Revenue’s evaluations of the tax holidays consistently show that they are a bad investment. That the apparent benefits to the economy are merely a result of consumers shifting the date they purchase items, rather than representing an actual increase in total sales.

These arguments are moot at this point, as far as this year’s sales tax holiday is concerned. This will be the 11th year of the program and, in spite of the criticism, most seem to still be in favor of it.

As the revenues lost in the process look to be a drop in the bucket compared to the massive overall budget the state works with, perhaps it’s not such a bad thing to offer just this one bit of respite to the consumer, who really seems to appreciate it.

 

Comments are closed.