Study: Tax Free Weekend a “political gimmick,” doesn’t help low-income consumers

Tax free weekend is an exciting time for many shoppers looking to snag a good deal, but does it provide relief to low-income consumers?

A study just released by “The Tax Foundation”, a Washington D.C. based think tank, says it doesn’t. The organization calls the weekend a “political gimmick”

It adds the holiday distracts policymakers and taxpayers from permanent tax relief.

It states, “If policymakers want to save money for consumers, then they should cut the sales tax rate year-round.”

The study explains Texas is only one of 16 states that’s holding a sales tax holiday this year. That’s down from a peak of 19 states in 2010, and down from 17 states last year.

It states, “At first glance, sales tax holidays seem like great policy.” But adds, “They represent a real cost for businesses without providing substantial benefits. They are also an inefficient means of helping low-income consumers and an ineffective means of providing savings to consumers.”

Shoppers ABC-7 spoke with don’t agree.

“I beg to differ, because I do think it does help,” Marie Enriquez said.

Dr. Tom Fullerton with UTEP’s business school said the impact the holiday has on consumers is limited.

“The one possibility where consumers do benefit is where family’s have multiple children in school and can save some money,” he said. “I would probably be better if state governments came up with programs that would directly help low-income households and targeted for low income households.”

He added it could also be a burden for some small businesses.

“For most businesses its manageable, but it does distort the way it goes about their normal business practices,” Fullerton said.

Tax free weekend in Texas is from August 11-13. New Mexico’s tax free weekend was last weekend.

To see the full study, click here.