Monday, August 08, 2005

Health impact fee holiday? 

Lots of states, like New Mexico, offer a sales tax holiday on a weekend, often to coincide with back-to-school buying. The Tax Foundation is against them, as John LaPlante points out. John's for them. Undoubtedly they are distortionary taxes (what the Tax Foundation calls "non-neutral".) What isn't pointed out in either place is that stores will gain more revenue, as they are less likely to offer sales on goods when demand is higher during the holiday.

And you could simply have no sales tax, like New Hampshire, and have 365 sales tax holidays.

Meanwhile, Iowa's doing a booming business in cigarettes.