Hello Dr. O’Neal & Classmates,
As the State Economic Director for the above scenario, the economic impact of tax holidays of up to ten days in my state reflects. Tax holiday for clothing and tax holiday for school supplies. There are only 16 states that still have the sales tax holiday this year. However research reports that the states lost $300 million due to sales tax holidays in 2016. It has been found that there are (2) factors involved in eliminating the tax-holiday. 1) Policy-Makers are pressured by constituents to concentrate on money, 2) The sales-tax holidays have not produced a big economic growth, (Povich, 2017).
On the other hand, there are those that also states it has advantages to have a sales tax holiday. 1) “It helps levels the playing field for brick and mortar retailers who face stiff competition from online sales many of which are tax exempt” (Povich, 2017, pg.3). 2) It generates a buying spree and big advertising campaigns which is good for economic growth. It is also noted that there are 5 states that have no sales tax at all (AK, OR, MT, DE, NH)(Povich, 2017).
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