“The conservative Tax Foundation and the progressive-leaning Institute on Taxation and Economic Policy don’t agree on much when it comes to taxes,” the Louisiana Budget Project countered in comments posted Thursday. “But both groups understand that ‘sales tax holidays’ – a favorite trope of politicians – are bad economic policy.”
Sales tax holidays do not promote economic growth or significantly increase consumer purchases; instead, buyers simply shift the timing of purchases, the Tax Foundation says. Some retailers raise prices during the holidays, reducing consumer savings.
The Institute on Taxation and Economic Policy likewise notes that consumers shopping during a sales tax holiday weekend may find that “the sales suspiciously don’t seem quite as good as they had been the weekend before.”