August 9, 2018

CNBC: Tax Holidays May Not Be the Bargain You Think They Are

media mention

Everyone loves a bargain.

Except when the bargain doesn’t really save you money.

It may feel great not to pay tax for back-to-school clothes and backpacks, but the Institute on Taxation and Economic Policy says sales-tax holidays do little to help students, teachers and public schools.

The lift on taxes can last an entire week in some places but for the most part takes place over a weekend around the time people are shopping for back-to-school supplies. Shoppers get a break on sales tax for items such as backpacks and clothing, up to a set dollar amount.

The tax-free periods are popular because they tell a feel-good story that seems to address real issues.

“The holidays appear to be a gesture that helps these struggling families and relates to education,” said Dylan Grundman, senior policy analyst at the Institute on Taxation and Economic Policy. Read more