I got this interesting link in my email yesterday. Apparently, in an effort to stimulate consumer spending, the National Retail Federation has asked President-elect Barack Obama to include a series of sales tax holidays in his upcoming economic stimulus plan. After a dismal holiday shopping season, retailers are really hurting for sales. The NRF proposed that tax holidays be held during March, July and October 2009, each lasting 10 days, including two weekends.
Many states already have sales tax holidays. Past holidays have been limited by dollar amounts or on certain items like clothing. In this proposal, the sales tax would be lifted on almost all taxable goods other than cigarettes and alcohol. The US Government would then reimburse all 45 states that have a sales tax. By temporarily lifting the sales tax for the three 10-day periods, the NRF estimates that consumers could save nearly $20 billion. Just think, that’s another $20 billion that the government will be handing out!
Your thoughts? Would it help you out?
photo by: House of Sims
I’ve gone to tax-free sale days at Gottschalk’s, of course those were not government supported. I guess if I didn’t pay taxes on cigarettes, it would be nice, but outside of that I don’t buy many taxable items. The tax on household goods don’t amount to that much, and I generally am just buying non-taxable food and gas. Maybe if sales tax were eliminated permanently, I’d change my buying habits. I buy more at amazon.com because of not paying sales tax than I have ever bought locally. If I added up what I’ve spent there in the last year, it would exceed by far what I have bought locally in ten years.
Your post seems to imply that it won’t help. I wouldn’t have the first idea of how to put together in my head, whether it would work or not. The whole “stimulate” the economy thing by going into debt to give us money, that supposedly if we go spend the money then everyone makes more money. There’s a limited amount of money, it’s not like spending it multiplies it. Then there’s the debt created at the onset.
@Yana During the process of learning about paying taxes for our business, I discovered that some states require consumers purchasing off the Internet to pay what they call “use” tax. I’m not sure if they think they’ll ever be able to monitor it one day, it seems to be an “honor” system type thing.
All a tax holiday would is to move forward expenditures by a few months. Stimulus checks, bailouts, and tax holidays are all gimmicks – expensive gimmicks that have to be paid back in higher taxes. Instead of a bailout, banks should have been allowed to fail and consolidate. Houses need to be foreclosed on. In my neighborhood foreclosed houses are selling because they are a good deal. Those displaced are now renting. Allow the economy to work and if the government insists on spending borrowed money let it be for extended unemployment benefits. By permitting failure, the economy will rebound much faster and with much less debt. Why do the people want the Federal government to come up with the right economic package when the government can’t even balance their own budget? How pathetic can things get?
@Rick – I agree with your 100%. I feel that we are holding the economy back by doing all of this gimmicks. Doing such things scare consumers even more. That is why consumer confidence is so low right now. It’s because we are injecting the fear in the people. Things are bad, yes, but are the bad as we are led to believe? Are we living in cardboard boxes?