Sales tax holidays are a stupid idea

Sales tax holidays are a stupid idea

The conservative Tax Foundation and the progressive-leaning Institute on Taxation and Economic Policy don’t agree on much when it comes to taxes. But both groups understand that “sales tax holidays” – a favorite trope of politicians – are bad economic policy. They don’t promote economic growth, nor do they raise consumer spending. All they do is shift the timing of some purchases, while draining revenue that supports important services like education and police protection that communities need. That didn’t stop the Louisiana Legislature from authorizing a tax holiday this weekend. The Times-Picayune | Baton Rouge Advocate’s Mark Ballard

The bill creating the one-time tax break for consumers whizzed through two committees and both chambers in a total of 11 minutes 14 seconds of debate, including votes on five changes to the legislation’s wording. Nobody voted against House Bill 26 and Gov. John Bel Edwards signed it swiftly. The Department of Revenue issued the regulations on how the holiday would operate on Monday.

The push to get Louisianans to leave their homes and go shopping comes as coronavirus cases soar to unprecedented levels

 

Lessons from Florida
This month’s decision by Florida voters to raise the state’s minimum wage to $15 an hour by 2026 has raised hopes across other Southern states that politicians might soon follow the will of their constituents. More than two dozen states and 50 localities have raised wages on their own while the federal minimum remains stuck at $7.25 an hour. But the issue has failed to gain political traction in large swaths of the Deep South – despite overwhelming popular support. National Public Radio’s Andrea Hsu reports:  

Louisiana is one of five Southern states that haven’t set their own wage floors, so the $7.25 federal minimum wage stands. Efforts to set a higher minimum wage or even to remove a state ban on localities setting their own have been blocked by Republicans in the state Legislature. “There have been any number of different ways that we’ve tried to move the needle on this issue and have just been unsuccessful,” says Ashley Shelton, executive director of the Power Coalition for Equity and Justice in Baton Rouge, which has been advocating for a higher minimum wage. It’s not for lack of popular support. A Louisiana State University poll found 81% of Louisiana residents support raising the minimum wage to $8.50, and 59% support raising it to $15. But unlike in Florida, ballot measures in Louisiana require approval from two-thirds of the state Legislature, both chambers of which are controlled by Republicans.


The racial impact of Formosa
A Baton Rouge district judge dealt a setback this week to the backers of a massive $9.4 billion plastics factory planned for St. James Parish. Judge Trudy White of the 19th Judicial District ordered state regulators to do a more thorough evaluation of the project’s impact on Black residents before air permits can be issued. The Times-Picayune | Baton Rouge Advocate reporter David Mitchell explains: 

During a Zoom hearing Wednesday, White told attorneys and others that environmental racism exists and operates through the state’s institutions — through personnel, policies, practices, structures, and history, intentional or unintentional, according to notes shared by the plaintiffs’ lawyers. … White also told (the state Department of Environmental Quality) and company lawyers that the air permits must have a complete environmental justice analysis and that DEQ did not balance pollution health risks with reasonable certainty, saying the agency made a conclusion without analysis. 

 

No hazard pay for retail workers
A new wave of panic buying is hitting retail stores as coronavirus infections rates soar nationwide. Unfortunately, the essential workers in these stores are not being given the same level of bonuses and raises this time around, despite increased risks to their own health and burgeoning profits of the companies they work for. The New York Times’ Michael Corkery and Sapna Maheshwari explain how these companies have leverage to use the influx of cash to benefit themselves and their shareholders through stock buybacks, at the expense of their employees. 

“We ask workers with the least to sacrifice the most, and they are not even getting compensated in return,” said Molly Kinder, a fellow at the Brookings Institution, who is preparing a report that ranks which largest retailers have been most generous to their workers during the pandemic. “The companies have the money to do this.” The issue of hazard pay for retail workers reflects the harsh reality of the pandemic economy — a case of shifting supply and demand. In March and April, when retailers were overrun with customers and workers were calling in sick or quitting, the companies needed to give incentives to employees to stay on the job. But when the additional unemployment benefits, totaling $600 a week, expired at the end of July, many more Americans needed jobs, making it easier for retailers to attract and retain workers.

 

Number of the Day
742,000 – Number of Americans seeking first-time unemployment aid last week, the first time in five weeks that the number has risen. Economists consider that a sign that the latest spike in coronavirus infections is taking an economic toll. (Source: U.S. Department of Labor via Associated Press