As a followup to my recent post about 2011 sales tax holidays, I wanted to share another nice map from the Tax Foundation.
(click map to enlarge)
The biggest thing that jumped out at me from this map was the tendency for sales tax holidays to be limited to southern and southwestern states. Yes, there are a handful of outliers in the midwest and northeast, but the overall geographic pattern is unmistakable.
Another interesting tidbit is that, in a related article, the Tax Foundation argued that “sales tax holidays are based on poor tax policy and distract policymakers and taxpayers from real, permanent, and economically beneficial tax reform.” They go on to argue that if a state needs to offer a “holiday” from their tax system, then perhaps their tax system is “uncompetitive.”
Further Texas has no taxes on food or a state income tax….one reason I moved here. So when they say the tax system is uncompetitive what do they mean. Places like Texas with its lower taxes are a bigger draw to newcomers then states with higher taxes like New york and California.
Take a closer look still. Missouri was a southern state in the civil war…every state except Iowa, West Virginia, Illinois, Massachusetts, and Connecticut fought for the south. In fact the only southern state that doesn’t have a (or had) tax holiday is Georgia. Now that is interesting.