Sales Tax Holiday Weekend: Good Idea or Nah?

This weekend is Georgia’s annual Back to School Tax Free Weekend. It’s a tradition in the Peach State, where a wide variety of items, including clothing, computers, and school supplies can be purchased free of sales tax. The governor’s Office of Planning and Budget estimates this year’s event will save consumers $74.5 million in sales tax.

In a press release, the governor said:

The back-to-school tax-free holiday allows Georgia’s families and students to save money on crucial school items, clothing and technology during a time of year when household expenses add up quickly. I commend the General Assembly for working with me to reduce taxpayer burdens in order to make our state a better place to work and raise a family, and it is my hope that parents and students will use this weekend to prepare for a successful school year.

Of course, there’s another way to look at it. The tax free weekend will rob the state budget of $74.5 million in needed funds that could be used for education or healthcare, or transit, or…

The AJC’s James Salzer, who has never met a budget he couldn’t eviscerate, has a story out this morning highlighting opposition to the tax holiday.

The Tax Foundation put out a report earlier this week saying there is no evidence the event promotes economic growth. It instead shifts when people who were already going to buy make their purchases.

In addition, it says, “Some retailers raise prices during the holiday, reducing consumer savings.”

The report said most sales tax holidays around the country “involve politicians picking products and industries to favor with exemptions, arbitrarily discriminating among products and across time, and distorting consumer decisions.”

There’s a lot more in Salzer’s story, including opposition from the Georgia Budget & Policy Institute and some lawmakers. Is the sales tax holiday a legitimate way to save consumers money on needed items as the school year begins, or is it just a way for pandering politicians to plunder the public purse? Comments are open.


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