3rd
Temporary Incentives
As the California sales tax bumps up temporarily to deal with the CA budget crisis, I was wondering how much of a boost those Macy’s “one-day” sales events actually create. My thought was that if these kind of sales really encourage a temporary increase in spending — shouldn’t the government use the same tactic, too, when collecting taxes? Was there any significant additional boost to consumer spending right before CA sales taxes went up? If there was, then it seems like California is missing out on a way to boost tax revenues with incentives like “buy more now, before we increase the sales tax on such-and-such date”…. But maybe the boost in consumer spending isn’t significant.. (Though, if that’s the case, then how effective are those “Presidents’ Day Sales” where certain stores discount their goods by offering to pay for the sales tax?)
