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Nice timing. Arkansas’s first back-to-school sales tax holiday is coming up and the Tax Foundation is out with a national roundup on states with such holidays and a recitation of the things that are wrong about these politically popular events. For example:

* The evidence strongly shows that sales tax holidays do not promote economic growth or significantly increase consumer purchases; instead they shift the timing of purchases. Some retailers raise prices during the holiday, reducing consumer savings.

* Sales tax holidays create complexities for tax code compliance, efficient labor allocation, and inventory management. However, free advertising for what is effectively a paltry 4 to 7 percent sale leads many larger businesses to lobby for the holidays.

* Most sales tax holidays involve politicians picking products and industries to favor with exemptions, arbitrarily discriminating between products and across time, and distorting consumer decisions.

* While sales taxes are somewhat regressive, this is often exaggerated to sell the idea that sales tax holidays are an effective way of providing relief to the poor. To give a small amount of tax savings to low-income individuals, holidays give a large amount to others.

* Political gimmicks like sales tax holidays distract policymakers and taxpayers from genuine, permanent tax relief. If a state must offer a “holiday” from its tax system, it is a sign that the state’s tax system is uncompetitive.If policymakers want to save money for consumers, then they should cut the sales tax rate year-round.

Just so you’ll know: The Tax Foundation is no liberal tax-and-spend outfit. Quite the reverse. I note for the record that the National Federation of Independent Business affiliate in Arkansas is touting the tax holiday as a way to get people “in the mood to spend.” They undoubtedly would like to leverage this into still more tax exemptions.

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Here are the somewhat detailed rules on the Arkansas tax holiday Aug. 6-7 on clothing (items worth less than $100 and accessories worth less than $50 per item) and school supplies (calculators are covered, for example, but not computers and other electronic gadetry).

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