Several years ago I bought a kitchen stove during the “sales tax holiday” in Massachusetts. Most years I ignore the “holiday” on sales tax. But the kitchen stove was a purchase I needed to make, so I waited for the tax free weekend. In my case, the retailer who sold me the stove did not benefit from the “holiday”—because I was going to buy it anyway, and all I did was time my purchase to avoid taxes. It was only the taxpayers who got the short end.
I have argued against the sales tax holiday for years. I took advantage of it—but I would have been pleased to see it vanish. This “holiday” idea goes back to 2004, the first year it was adopted. The only year since then when there was no ‘holiday’ was in 2009. That means for 11 years we have thrown away tax receipts.
The Department of Revenue has estimated that the sales tax holiday in 2015 resulted in a loss of $25.5 million. If we use that estimate as a guide, 11 years of tax losses amounts to $280.5 million. That’s enough money to buy home care services for 50,000 seniors for an entire year. Most citizens have no idea where the sales tax goes. It’s used for the MBTA Contribution Fund, the School Modernization and Reconstruction Trust Fund, and the Convention Center Fund. The rest goes into General Revenues. But if these funds were hurting, General Revenues would have to bail them out, and programs like human services would take the hit, as they always do.
If you ask me to choose between a sales tax holiday or keeping 50,000 seniors at home—the choice for me is simple. That’s why I applaud the legislative leaders who realized that this summer the commonwealth could not afford a sales tax holiday.
“When you’re talking about the shortfall that we’re in,” House Speaker Robert DeLeo (D-Winthrop) told the media, “to add another $26 million to that shortfall just doesn’t make a whole lot of sense.”
“It’s too expensive,” agreed Senate President Stan Rosenberg (D-Amherst.)
Several weeks ago, the Legislature cut about $4 million from the elder home care budget—a move which will force waiting lists for home care. The legislature and the governor left home care with less money than it had the year before. Given such revenue shortfalls, it would have been absurd to lose $25 million in sales taxes. The fact is, we lose tens of millions of dollars in taxes due to breaks we give to certain industries, like the film tax credit, which has proven to be of little value economically. These so-called “tax expenditures” are of little value financially to the commonwealth, and take away support from programs that most taxpayers value, like home care for the elderly.
Sometimes we get our priorities right. It made sense to cancel the sales tax holiday this summer. I would be fine with cancelling sales tax holidays forever, and making a commitment to our seniors that we will never force them to wait for home care.
Al Norman is the executive director of Mass Home Care. He can be reached at firstname.lastname@example.org or at 978-502-3794.