The Case Against the Sales Tax Holiday

The Tax Foundation, a conservative-leaning group, has a report (“Sales Tax Holidays: Politically Expedient but Poor Tax Policy“) making the case against sales tax holidays like the one expected to save Texans about $65 million this weekend.

The report is worth a look because you will not see very many politicians willing to take on such a politically popular notion. Governor Perry has been out reminding citizens about the tax holiday and State Senator Rodney Ellis, an author of the original 1999 bill that created the holiday, was at Macy’s urging that the holiday should be protected. Ellis defends the holiday because the cost to the state is a small compared to the tax breaks to energy companies.  Of course, we could consider getting rid of both sets of tax breaks. And, maybe a three-day shopping orgy isn’t the only way to help make going back-to-school more affordable for working families. In any case, it’s a popular tax break that isn’t likely to go away.

Rick Perry at WalMart
Texas Senator Rodney Ellis as Macys

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