Tax holiday offers us much-needed relief

I’ve had a teal green 1995 Plymouth Neon for about three years. I paid it off a year ago. It’s never been perfect (when I bought it, I noticed “Hi” had been scratched in the paint on the passenger door), but it’s put up with a lot of commuting, several food spills and two cross-country road trips.

But now the green machine is getting old and has developed its share of problems. When turning left, the turn signal sticks and makes an awful grinding noise. Sometimes, when I turn on the heater, it sounds like the baseball cards you attached to your bike spokes as a kid. Last week, it wouldn’t start because the battery cables are corroded. And for about the last two months, any pressure on the brake pedal, however gentle or forceful, sends the entire car into convulsions. It’s time for a new car.

So what’s the problem? I’ve just gotten into the “real world” with a real job and a modest amount of cash. Adding a car payment would be no problem, except for the other mounting pile of expenses: student loans (which come due in December), increased rent (as I move out of crappy University-area housing), health insurance (which I never had to pay before). You get the point. And I’m not even including the wedding and honeymoon expenses I’ll have to deal with in five short months. Where am I supposed to squeeze out another $250 for a monthly car payment? I have been crossing my fingers my car holds out, with only minor repair costs, until I or my soon-to-be-husband get a new job or a substantial raise.

Luckily, the U.S. Congress might save me. Recently, Senator Patty Murray, D-Wash., and Senator Olympia Snowe, R-Maine, proposed a 10-day, nationwide sales tax holiday effective for the 10 days
following Thanksgiving. Representative Lindsey Graham, R-S.C., introduced similar legislation in the House.

If passed, this legislation would suspend sales tax across the country between Nov. 23 and Dec. 2. The goal of this holiday is to
stimulate Christmas shopping, as well as other large purchases. While perhaps not solving our economic crisis, this holiday would contribute to its recovery.

I’m with the plan all the way. For someone who had been thinking about buying a new car in another 6 to 8 months, this sounds like a gold mine. I could get upwards of $1,500 in sales tax off a car, which gives me the incentive to buy my new car earlier and find a way to make the payments work. There are many others like me across the country who would take advantage of this sales tax holiday to make a large purchase they would not have otherwise made for many months. This would give the economy a kick in the pants and jolt financial growth.

Individual states have tried halting sales tax for short periods of time with great success, according to a National Public Radio report. Senator Snowe said in a Nov. 2 New York Times article, “This represents a direct infusion into the economyÖIf we have a bad holiday season, it will exacerbate our poor economic circumstances the rest of the year.”

Most of the retail outlets that would be deluged with customers during this sales tax holiday make a large percentage of their annual sales during the holiday season. If consumers are stymied this season (which consumer confidence reports suggest they will be), those retailers are going to incur severe losses. The sales tax holiday proposal has generated bipartisan support among senators and representatives, and the White House is reportedly interested.

The bills mandate that states would suspend the sales tax and, upon its completion, the federal government would reimburse states. The bill to the federal government could exceed $6.5 billion, according to news reports. But not everyone is convinced. State leaders are concerned about the timeliness of the reimbursements, particularly if their state has any bonds that are paid by sales tax. The issuance of checks to states is a quandary for those in Congress, but does not pose a problem to the legislation itself. In addition, five states do not have any sales tax and those shoppers would not be affected by the holiday.

But, as Murray told The New York Times, even states with no sales tax have industry that would benefit. For instance, sales tax-free state Oregon is home to Nike, which would benefit from the holiday. Camille Barnett, former city manager of both Washington and Austin, told syndicated columnist Neal Price the holiday is a “cockamamie” idea because consumers will just hurry to buy big-ticket items and then curtail spending after the sales tax holiday.

While I agree many will do just that, the sales tax holiday would still give the U.S. economy the jumpstart it needs. Consumer confidence would be raised and those big-ticket items would bring an infusion of cash flow, which might not be realized otherwise.

Although there are some bugs to be worked out, a sales tax holiday is an innovative and beneficial way to bring some life back to the U.S. economy. It would give holiday shoppers an added benefit to buy a few more things they might not have bought otherwise – and millions of holiday shoppers each buying a few more things adds up. In addition to millions like me -whose cars, refrigerators, washers and dryers, computers or camcorders are just about reaching their expiration dates – it would give incentive to fork over the money for new ones.

In trying times such as this where America’s economy and consumer confidence have taken a hit, such allowances will rejuvenate the lifeblood of our nation and make us strong again. A sales tax holiday will be ultimately profitable for both citizens and the nation as a whole. The government should give us a break – after all, it is the holiday season.


Erin Ghere’s column appears alternate Mondays. She welcomes comments at [email protected] Send letters to the editor to [email protected]