On the last sales tax holiday, I splurged and bought the Taj Mahal of swing sets, plunking down $2,400 for a monument to fun (First kid, don’t judge). This year I will probably head over to Costco and buy six jumbo boxes of diapers just to stick it to the tax man (Second kid, standards change).
Many residents of Massachusetts will be doing the same thing this weekend, stocking up to take advantage of a sales tax holiday that saves them 6.25 percent on most purchases. The two-day reprieve cost the state $23 million last year, but our Beacon Hill leaders feel good about the move because it helps consumers and drives extra business to merchants.
You know what would feel really good? The state rolling back the sales tax to 5 percent. Raised in the throes of the Great Recession, when the world as we know it was crumbling, the sales tax is generating close to $1 billion more a year now than it was then.
We have been paying the higher tax rate since August 2009, and now that the economy is recovering and all tax revenues are stabilizing, it’s time to lay the groundwork for a lower sales tax. The state posted $627 million more in tax revenues than anticipated last fiscal year, according to preliminary figures. And when we give more money, Beacon Hill is certainly comfortable spending it, increasing the state budget last year and continuing the trend this year in part by raising $500 million in taxes on cigarettes, gas, and computer services.
More than a dozen states bumped up their sales taxes during the recession, and now some are reversing course. California, Arizona, and North Carolina have lowered their tariffs, and the District of Columbia will return to its 5.75 percent rate, down from 6 percent, in October, according to the Tax Foundation, a nonpartisan research organization.
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