What’s the big deal about the sales tax holiday?
Maybe it’s just me but I don’t see what the bid deal is about the sales tax holiday. How many people would normally get excited if a store advertised a sale offering a 4.225% savings (the state portion)? Sales tax has a portion collected that goes to the state and a portion that goes to the city. The list of cities that are not participating is very long. A partial list of the cities not participating include: Ballwin, Brentwood, Bridgeton, Clayton, Des Peres, Ellisville, Fenton, Frontenac, Kirkwood, Ladue, Manchester, Maplewood, Overland, Richmond Heights, St. Ann, St. Peters, Town & Country, U City, Webster Groves. If it’s such a good thing why are all these cities not participating? According to articles I have read this event annually packs stores and makes cash registers hum all across the state. I recently saw a TV report which interviewed Illinois residents driving to Missouri to take advantage of the sales. Maybe people just hate taxes so much that anything that reduces tax is seen as a good thing. I think the big draw is that retailers will be having additional sales to get people into the stores. Again I just don’t see the big deal. I would much rather wait until later and go into a store that wasn’t packed and pay the 4.255% more.
It’s not clear how much the state loses in general revenue during the tax-free weekend because the state doesn’t track these numbers. Some experts predict as much as $30 million lost in sales tax. You have to wonder in this budget environment whether it’s worth it. The tax holiday seems to benefit the more affluent households and is little relief for families in the bottom 20 percent of earners. People are saving money on the one hand at the expense of lost revenues which impact programs and services that benefit low income people. I just wonder if it makes sense.