To summarize: It won't help, the economy is still screwed, move on.

Damn it's good to have Chris writing posts again.

The NRF is looking for a band-aid for a very infected wound. Sure, we'll all benefit from a tax holiday, and take full advantage of it.

First, some people will move toward online ordering, which is already mostly tax-free (or at least the tax cost is factored into the price).

Second, more people (as the post points out) will wait until the tax holiday to make major purchases.

The remaining consumers this will affect don't have much impact on the economy. If they did, the major price breaks that retailers are offering right now would be driving a record retail sales pace, which it isn't, and tax breaks won't.

I agree with: lower the tax rate, don't bother with the tax holidays.

Don't tax holidays mostly benefit stores that sell big-ticket items, anyway? (Expensive electronics, big appliances, furniture.)

If you want tax-free clothing and shoes, come to Rhode Island. (Lots of people from Massachusetts do!)

If you want to buy tax free shop in Oregon! :-)

Okay, tell me if I'm missing something (my brain is already drunkenly celebrating Christmas), but states, counties, and/or municipalities determine the sales taxes in their area, not the federal government. So, how exactly could the President create a tax-free shopping holiday?

@liz.lemonade:
Congress could pass a law suspending all local sales taxes for a specific time period.
That would be wonderful here in Cook County [Chicago] which has the highest sales tax in the country [10.25%] due to the totally corrupt & incompetent State of Illinois, Cook County Board & City of Chicago!

And how would that make ANY difference in states that have NO sales tax (Alaska, Montana, Oregon, Delaware, New Hampshire)?!?

The only state that would really benefit from this would be California at 7.25%.

@Greasy Thumb Guzik: Hey I'm in Cook County too! That's why I buy most of my stuff online at amazon or newegg.

Maybe they could just announce the tax free holiday a couple days in advance? Then people wouldn't suspend major purchases but the tax would spur impulse buys!

@Greasy Thumb Guzik: Yeah, and drive the states nuts as their carefully balanced budgets go down the tubes due to the loss of taxes for a month. Not that the fed would understand that, since they just print more money to cover whatever shortfalls they may have.

@aaron8301: I pay 7.75% in Washoe County, Nevada. There are plenty of regions that would benefit greatly from it.

The powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.

@tgpt: Nobody pays attention to that anymore (and most people don't even know about it). So sad.

Many states including DC have sales tax holidays for back to school. Most of them occur around the first weekend of August. It's a nightmare for most retailers who have to figure out how to manage what items are exempt and which are taxable. Other than the states that do not impose a sales tax I cannot think of an across the board sales tax holiday.

Concerning the Federal government getting involved in state and locally administered sales tax scares me a little. There's been talk about a Federal sales tax for years but of course that would be added on top of a state's current sales tax. We'd have a PST/GST situation down here. Not cool. Even if the Feds recommend a national sales tax holiday there's going to be a huge fight in every state house across the country. And what about those 4 states without a sales tax? Is that really fair to them?

Wow! it's been awhile since I could ramble on about my favorite topic. I'll stop or I'll be up all night.

@tgpt: oooh, a constitutional challenge! I love a constitutional challenge. The thing is, the Constitution gives a great deal of leeway based on context in the form of the Preamble, and that is what ends up shooting down most challenges to US government intervention like this.

The specific piece of the Preamble (edited for space) that would authorize this in context is:

promote the general welfare

In other words, the constitutional rules are intended to (among other things) promote the general welfare, that is to say the welfare of all the states in aggregate, ergo an effort by the United States to improve the General Welfare would be constitutional, even if it had zero or negative effect on specific states.

Sure, the states can challenge this, and if this idea goes forward, I'm sure some will. But the White House Legal Counsel is generally appointed based on their experience arguing constitutional challenges to government actions.

So who do you bet wins?

@aaron8301: 8.5% in my part of CA. But, yes this is with County and City added in.

Looks like retailers are asking for the impossible. What do you exclude? State programs generally exclude everything but school associated items. This idea is just going to bust the economy and people will likely just max out credit cards, making the only one really happy, the banks. They already got their money.

As someone who's Canadian and pays 13% on all items, even I think this would stall shopping until the day. I want it, but it'd have negative effects.

Also, it's nice to see Chris posting again, it's like he's a regular again. It's great.

@humphrmi:
You were close on the constitutional analysis, but the "general welfare" clause is in Article I, Sec. 8, not in the preamble (although the phrase appears there too).

For reference:
"The Congress shall have power to lay and collect taxes, duties, imposts and excises, to pay the debts and provide for the common defense and general welfare of the United States; but all duties, imposts and excises shall be uniform throughout the United States".

The general welfare clause has unfortunately been used throughout history for all kinds of Congressional sins, unfortunately.

@ElizabethD: Or just go to New Hampshire instead which has no tax on items period.

@Greasy Thumb Guzik: Sir, are you suggesting that all the money Chicago raises does not go to planting flowers in our medians? If so, I bid you good day!

@Greasy Thumb Guzik: No, they couldn't - states' power to tax is based on their own sovereignty, not on any federal grant of power that can subsequently rescinded. Congress COULD, however, make it a requirement of some particular federal funding that states suspend sales tax on a certain day.

All the comments of the feasibility of this notwithstanding, if there would be one day to avoid retailers during the holiday seasons, it would be a national tax free holiday.

I think it would be best for both parties (the shopaholics and shopping scrooges) if they had this happen on Black Friday.

@humphrmi: As for moving to ordering online, that is what I am starting to do. I took advantage of the $150 of a PS3 with a new PlayStation CC. Sure, I could have went up to a brick and mortar store and had it that day. Or I could order online. Wait a few days for free shipping, and save nearly $30 on taxes.

I think it would help if they just stopped taxing period. I bet that might stimulate the economy a little.

I just want retailers to sell something that doesn't fall apart in a few months or isn't the latest lame fad.

They do it all the time already - you know the Tax Free shopping Holiday for back-to-school?

@Cyco: Not for long. States with sales tax wouldn't take long to build a pretty significant deficit (or add to an existing one).

And once you remove it, it's really difficult to bring it back, particularly if it requires a ballot initiative. Most people are excellent at choosing short-term good over long-term good, particularly with respect to taxes: they'll vote to decrease taxes and then complain when services have to be cut.

@ElizabethD: Massachusetts doesn't have a tax on clothing either. Or groceries, though you have to factor in the line between regular food and prepared food, as some is subject to the meals tax...mostly those roasted chickens from the deli, and things like that.

You know The Simpsons predicted this would happen years ago with Trash of the Titans. So in preperation of the season HAPPY LOVE DAY EVERYONE.

@sven.kirk: Same here. Did all my X-mas shopping online this year. No tax spent. And got free shipping.(Saved $64 on shipping...woohoo!)

@Oranges w/ Cheese: The tax-free back-to-school holiday was not nationwide--several states decided to institute it on their own. Onlydarksets is correct. The federal government cannot simply suspend a state-levied sales tax, but it could say "we're going to give out all this money, such as for new roads, and you don't get it unless you suspend you sales tax for a day."

@Cyco: Yeah, because no one should have to pay for the services they expect the government to provide.

@Greasy Thumb Guzik: Gotta love those Illinois/Chicago politicians! They sure do know what they're doing! Can't wait to have one for president!

@sven.kirk:

I did the same thing, and have been doing this for several years. The first year I shopped online, it was 50/50 online/brick & mortar stores. Now it's more like 99/1.

@ElizabethD:

I don't know if it's still the case, but Delaware was tax free when I was living in PA.

And PA didn't tax clothing.

@humphrmi:

The Preamble outweighs the 10th Amendment?

@Oranges w/ Cheese: That is done state by state, not at the Federal level.

@xay: Just advertise the Lottery more!!

@ShadowFalls: That's a pretty broad statement on exclusions. In Mass., the Tax Holiday is for just about everything that is $2500 or less (alcohol, tobacco, vehicles were excluded).

Maybe we need a holiday on alcohol and tobacco taxes...

@pixiegirl1:

or Delaware!

@aaron8301: 8.25% in Texas.

@tbax929: yup, delaware is still tax-free. i live here ;)

@aaron8301: it would probably hurt the tax-free states, too. i live in delaware and around the holidays we always gets lots of shoppers from new jersey, pennsylvania, and maryland coming over here to buy big-ticket items.

See, the problem is, every day is a tax free holiday for me, because I do ALL of my shopping online (and don't live in socialist NY).

As for brick and mortar stores...I guess it will help with grandmas and grandpas shopping!

@aaron8301: In NY, the sales tax is 8.25% state and in my particular county, it's 8%. So yeah, this would definitely benefit NY, especially with Patterson's plan to tax us to death because Pataki left us with a $12 million dollar budget gap.

@RandomHookup: Thank you.

This is a RETARDED idea.
How many people are going to rush right out for the

**** 7% OFF SALE!!!!!

woo hoo, save 7%, seven freaking percent! yippee ha yay!!!

@krispykrink: Alameda County in CA: 8.75%

We did most of our big item shopping online: Amazon rocks. No sales tax, no shipping. Everything arrived quickly.

With the Governator wanting to raise sales taxes...looks like more of my $$ will be used online.

@RandomHookup: That should work out fine. Is there a state where the Lottery money isn't just a slush fund for legislative pet projects and sketchy contracts?