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Gimmick or not
Annual sales tax holiday here to stay

A sign reminding customers about the Sales Tax Holiday weekend at Famous Footwear in the Promenade Mall on Aug. 7. JAMES GIBBARD / Tulsa World
 
By World's Editorial Writers
Published: 8/31/2009  2:22 AM
Last Modified: 8/31/2009  4:01 AM

Sometimes it's actually possible for both sides to be right in an argument.

A new report by the Washington, D.C.-based Tax Foundation sniffs that 16 states, Oklahoma included, which hold sales-tax holidays have created little more than a gimmick — an event that distracts policymakers and taxpayers from real, permanent and economically beneficial tax reform.

Oklahoma lawmakers who support the sales-tax holiday, including Sen. Jay Paul Gumm, D- Durant, claim the report ignores the fact that the tax respite benefits those most harmed by sales taxes — lower-income families. Last year, Oklahomans saved $6.4 million in sales taxes during the sales-tax holiday.

The Tax Foundation is absolutely correct that sales-tax holidays do not promote economic growth or significantly increase consumer purchases on a long-term basis.

But Gumm and other supporters of the holiday are correct that thousands of families actually do get short-term benefits. It does, as Gumm said, "help level the playing field for middle- and low-income families by reducing the most regressive tax at one of the times of year (back-to-school time) when families spend the most."

Another advantage to the holiday, argues Senate President Pro Tem Glenn Coffee, R-Oklahoma City, is that it keeps revenue in Oklahoma and helps promote the economy.

Both sides make valid arguments. The truth is that Oklahoma and its cities and counties are far too reliant on sales taxes — those taxes are the most regressive for those who can least afford them. Changes in the tax structure could help out middle- and low-income families. But that's unlikely to happen anytime soon.

In the meantime, the brief sales-tax holiday is a relatively harmless feel-good event that's here to stay.

Trust us when we say a sales-tax holiday is hardly the distraction that's keeping lawmakers from overhauling the tax system and making it more equitable.
By World's Editorial Writers

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TCB, (8/31/2009 6:37:06 AM)
"thousands of families actually do get short-term benefits."

That's a pretty big assumption. I think it's more likely that a handful of large retailers get short-term benefits. Here's a good story for next summer. Track the every day prices on a set of back-to-school goods in the months leading up to the holiday, then see what the "tax free" prices are. I bet they are marked up about 8.5%, before they're sold "tax-free."
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my view, Sand Springs (8/31/2009 8:20:10 AM)
TCB,

What I see is retailers running sales leading up to and on the tax free weekend on school supplies. I help my grandkids parents buy school clothes everyear and most are bougth on that weekend, I don't see a conspiracy.

Between the five of them I save about $57. I do think it would be a good idea for the TW to track it, just for curiosity sake.
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billy8, Sand Springs (8/31/2009 9:22:45 AM)
8.5% is the bottom tax, it's sometimes higher in other cities that use it for revenue. I have lived in states with a much lower sales tax and no tax on groceries, and they have a lot more to show for it. Where does all the money go in Oklahoma? We pay and pay and never get anything in return except we are asked to pay more for the shortfall they experience. We're just throwing money down a hole that never fills up.
Report Comment
Loophole, (8/31/2009 11:11:19 AM)
Where DOES that tax money go? Oklahomans have been asking that since statehood.
Report Comment
Jay of Tulsa, (8/31/2009 11:29:37 AM)
Where DOES that tax money go? Oklahomans have been asking that since statehood.
===========
And WE ARE STILL WAITING FOR ANSWERS!!!!
Report Comment
Peter Piper, TULSA (8/31/2009 1:15:15 PM)
QUESTION??? I thought the Legislature recently passed a Bill eliminating the state tax--about 4.5%--on groceries, but I am still paying it at the grocery stores.Anybody got an answer?Thank you!
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M_Sizzle, Tulsa (8/31/2009 2:40:52 PM)
My girlfriend works in retail and she said that tax-free weekend makes them as much money as the week leading up to xmas.
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my view, Sand Springs (8/31/2009 2:44:55 PM)
Peter Piper,

That's because they didn't pass it. Acording to the state constitution, if the state can't tax it neither can local government. The constitution would need to be changed and that takes a vote of the people.

Our cities are not allowed to impose a income tax by constitution most their funds comes from sales tax. Some small towns groceries are the number one sale item.
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Mike S, Tulsa (8/31/2009 3:32:45 PM)
PeterPiper - to add to "my view"s answer, you probably heard that the House and Senate each passed a bill but those were very different and leaders in both bodies acknowledged that w/ an income shortage, it simply wasn't realistic for the State to cut that much money out of the budget.
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Thunder196, Tulsa (8/31/2009 3:57:37 PM)
Retail merchants count on two main times each year to keep their businesses stable. Back to School and Christmas. If they don't make it big at those two times, they could end up struggling financially.
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human1, A change is gonna come someday (8/31/2009 4:14:57 PM)
Interesting article!
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Nickie, (8/31/2009 6:02:35 PM)
The back to school sales are terrific. Jeans can be bought at a good discount. At prom time the gowns are more than half slashed off. Love that tax free program for the folks that are able to get out in the crowd.
Report Comment
Bedazzled, (9/1/2009 12:30:34 AM)
It is a win/win for the economy/the retail business and the customers. Texas had Tax Free days before Oklahoma and did not exclude a dollar amount unlike Oklahoma on certain items in different stores.
 

 
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