It's August, so it's time for the annual ritual known as the sales tax holiday, says Steve Chapman in Reason. This year, 18 states from Texas to Vermont will deploy this "gimmick" under the logic that it both helps retailers and saves parents money "on school supplies and clothing" — while simultaneously allowing politicians to portray themselves as "stalwart champions of the average person." In this economy, they can even peddle the relief as "an ingenious form of fiscal stimulus." The trouble is, the whole thing is a boondoggle that does nothing it's supposed to do. Here, an excerpt:
In reality, the exemption doesn't increase overall economic activity. It merely induces people to delay or accelerate purchases to fit into the time window. When New York had a sales tax holiday for clothing in 1997, sales jumped during the week it was in effect — but for the full quarter, it was a wash.
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