Massachusetts Tax Holiday
This past weekend, the Commonwealth of Massachusetts had a tax-free weekend; the state sales tax, 5%, was suspended on all purchases less than $2,500.
And, yes, according to the Boston Globe, the state lost $30 to $50 million dollars in tax revenue. The hysterical letters to the editor repeated the same $30 to $50 million dollar figure and one talked of the missed opportunity to “repair” our bridges with the “lost revenues".
Well, to my liberally extreme neighbors who repeatedly return tax-and-spend, liberal, extremists to the U.S. Senate and House of Representatives: so did you buy anything during the “tax holiday”? To anyone that answered “yes”, now do you get it? If not, let me explain:
The state did not lose $30 to $50 million dollars in tax revenues. My goodness, the ignorance of anyone that repeated this number and considered no other directly, related activity. The number suggests that over the weekend, there were an estimated $600 to $1,000 million dollars in retail sales. How much of these sales would not have been made if there was no holiday? Of course the tax on the additional sales cannot be included in the “lost revenue” number. I’ll concede that most purchases were for items that were going to be purchased anyway and the timing of the purchase just shifted . . . but this does not mean the state lost tax revenue.
Consider, all the “extra” sales compelled all the drivers of all those cars to buy gas. The state sales tax on a gallon of gasoline is $0.21 per gallon. The $30 to $50 million in “lost revenue” was not reduced by the increased gasoline taxes collected. If anyone drove through a toll booth they would not have otherwise, bam!, tax revenue to the state.
Consider, all the “extra” sales compelled the employers to add additional employees to cover the sales floor and cash registers. I’m sure the payroll taxes paid for just the “extra” sales help and the personal income taxes paid by the employees was not deducted from the “lost revenue” figure.
Consider, the employees who worked additional hours over the weekend, now have more disposable income . . . even after all the tax withholdings. My bet is that none of them will save the extra money; they will all most certainly spend the money, thus probably paying a sales tax when they do.
Consider, the publicly traded companies that do a considerable amount of retail business in Massachusetts probably improved their financial position because of the holiday. Maybe the stock price will get a bounce (yes, I’m aware the Dow is well off its high of 14,000.41). Massachusetts residents who sell on the pop will pay a state income tax. Or, maybe the company will pay a dividend to shareholders. Again, the dividend will be taxed. Oh, and if the Massachusetts resident spends this dividend in Massachusetts, yup!, you got it, taxed again!
And, on and on it goes.
Tax cuts stimulate the economy.
And, I’ll take this opportunity while discussing taxes to repeat one of my core beliefs: my money is my money.
This past weekend, the Commonwealth of Massachusetts had a tax-free weekend; the state sales tax, 5%, was suspended on all purchases less than $2,500.
And, yes, according to the Boston Globe, the state lost $30 to $50 million dollars in tax revenue. The hysterical letters to the editor repeated the same $30 to $50 million dollar figure and one talked of the missed opportunity to “repair” our bridges with the “lost revenues".
Well, to my liberally extreme neighbors who repeatedly return tax-and-spend, liberal, extremists to the U.S. Senate and House of Representatives: so did you buy anything during the “tax holiday”? To anyone that answered “yes”, now do you get it? If not, let me explain:
The state did not lose $30 to $50 million dollars in tax revenues. My goodness, the ignorance of anyone that repeated this number and considered no other directly, related activity. The number suggests that over the weekend, there were an estimated $600 to $1,000 million dollars in retail sales. How much of these sales would not have been made if there was no holiday? Of course the tax on the additional sales cannot be included in the “lost revenue” number. I’ll concede that most purchases were for items that were going to be purchased anyway and the timing of the purchase just shifted . . . but this does not mean the state lost tax revenue.
Consider, all the “extra” sales compelled all the drivers of all those cars to buy gas. The state sales tax on a gallon of gasoline is $0.21 per gallon. The $30 to $50 million in “lost revenue” was not reduced by the increased gasoline taxes collected. If anyone drove through a toll booth they would not have otherwise, bam!, tax revenue to the state.
Consider, all the “extra” sales compelled the employers to add additional employees to cover the sales floor and cash registers. I’m sure the payroll taxes paid for just the “extra” sales help and the personal income taxes paid by the employees was not deducted from the “lost revenue” figure.
Consider, the employees who worked additional hours over the weekend, now have more disposable income . . . even after all the tax withholdings. My bet is that none of them will save the extra money; they will all most certainly spend the money, thus probably paying a sales tax when they do.
Consider, the publicly traded companies that do a considerable amount of retail business in Massachusetts probably improved their financial position because of the holiday. Maybe the stock price will get a bounce (yes, I’m aware the Dow is well off its high of 14,000.41). Massachusetts residents who sell on the pop will pay a state income tax. Or, maybe the company will pay a dividend to shareholders. Again, the dividend will be taxed. Oh, and if the Massachusetts resident spends this dividend in Massachusetts, yup!, you got it, taxed again!
And, on and on it goes.
Tax cuts stimulate the economy.
And, I’ll take this opportunity while discussing taxes to repeat one of my core beliefs: my money is my money.
posted by Zack at 6:47 AM
3 Comments:
can't argue with common sense...
I agree with many of your points. However, the "my money is my money" mantra is difficult to justify in a country where citizens expect a certain level of "services." Not sure if your children are educated through the public schools but I'm sure you know that good schools need money to run successfully. I understand your position as it relates to social security, but not sure how the country can offer citizens advantages without a revenue stream.
Gosox,
I'm against confiscatory taxes not all taxes. To raise an Army, Navy and Air Force costs money. I'm happy to pay for that. To raise a police force and a fire department costs money. I'm happy to pay for that. And, as you say, public schools cost money and I'll gladly pay for those. We can surely add many things that a community (local, state, federal) needs and should be paid for by the community. I simply think the list is shorter than my liberal friends and family. Let's decide what the community really needs (just like my wife and I decide what our family truly needs) and collect the taxes for those needs. Let's not collect as much as we can from taxpayers and then go find things on which to spend the tax revenue; surely, this had to be how the National Endowment for the Arts was born.
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