August 21, 2009
Staff Economist Mark Robyn Discusses Sales Tax Holidays with VT Newspaper
"Vt.'s sales tax holiday wins mixed reviews"
By Neal Goswami
Local retailers say they are anticipating high sales during today's statewide sales tax holiday. Opponents of the event say it does more harm than good. ...
Mark Robyn, a staff economist for The Tax Foundation, a conservative-leaning research group, said the revenue loss is just one reason sales tax holidays are "not really very good sales tax policy."
"Either the state can cut spending ... or the state can increase taxes somewhere else. It's sort of a detriment to the state," Robyn said. "You would think that if the sales tax is really such a burden to people in Vermont lawmakers would want to cut it all year."
Consumers tend to wait for such events to purchase big ticket items, he said.
"Studies have indicated that most of the increase in spending during a sales tax holiday is due to a timing shift," Robyn said. "There's really no overall increase in consumption to benefit businesses." ...
Such events are political gimmicks, according to Robyn. "It's a photo op for politicians who want to look like they're cutting taxes," he said. "There's better ways to save taxpayers money than a sales tax holiday."
In fact, some states have dropped similar events this year because of the economy, including Florida, Maryland, Massachusetts and Illinois, Robyn said.
"These states were explicitly saying, 'Listen, this is a cost to the government,'" Robyn said.
