The Making of the Sales Tax Holiday, 2015

As I count down the days and hours until the August sales tax holiday, when I can save $20 on the four new (tax free!) tires my car needs because of the deplorable condition of our roads, some thoughts on how this year’s holiday came about.

As is typical, the Legislature waited until late July to enact the holiday bill, perhaps deterred by the words of the former Chairman of the Senate Ways and Means Committee, who once described the holiday as perhaps not the finest public policy on the planet. But as is also typical, by late July, retailers have already advertised not only the existence of the holiday but also have hinted broadly about when in August it will occur. And the Legislature does not excel at taking candy from babies.

This year, more legislators in both House and Senate joined the ranks of sales tax holiday skeptics, and this time they also had the Mass. Taxpayers Foundation in their corner (the holiday “is getting increasingly more difficult to justify”). But even as they scored more points than ever in the policy debate, they knew they were outnumbered, despite the fact that many of those supporting the holiday were pretty listless about it  (Senator Marc Pacheco, one of their number, distilled this lethargy into a single sentence: “I will be voting for it reluctantly so that the Senate is not blamed for stopping it”).

The success of the sales tax holiday owes much to the inherent popularity of any law that lowers consumer prices, but not everything. The holiday’s primary lobbyist, according to the Globe, is an “aw shucks, good old boy” who’s very popular on Beacon Hill. The holiday also has think tank support from the (Koch-funded) Beacon Hill Institute. The Institute weighed in with the requisite charts and tables demonstrating the enormous boost the state economy would receive from the holiday, including the rather astounding news that this year’s holiday would generate as many as 860 jobs (note to the Institute: those sound more like “shifts” than jobs”).

And yet another factor: the Massachusetts Fiscal Alliance and their kinfolk at the Independent Expenditure PAC, Jobs First.

You may have heard of Mass. Fiscal during last year’s election season when their “voter education” efforts, which targeted 20 Democratic incumbents in the House of Representatives, came in for some harsh reviews, such as this one by PoliSci Professor Peter Ubertaccio and this one by David Bernstein at Boston Magazine (as well as this one by your author).

Mass. Fiscal’s voter education mailings charged the 20 targeted Democratic incumbents had taken the horrifying position that “illegal immigrants” (their term) should come before veterans on the wait list for state public housing vacancies. The professor and the journalist both concluded that this sort of “ridiculous, incendiary nonsense” purporting to be voter education amounted to an abuse of Mass. Fiscal’s tax-exempt status. As David Bernstein concluded:

If your purpose is to get average voters whipped up against an incumbent, the dozens of real, actual votes they take about various real, actual spending measures won’t be as effective as a vote supposedly about benefits possibly going to illegal immigrants, and linking that vote in a basically dishonest way to claim that those benefits are being willfully taken from veterans.

But with the help of the $410,000 chipped in by the Jobs First Independent Expenditure PAC, Mass. Fiscal delivered an average of 95,000 pieces of mail to each of the districts of the 20 targeted Democratic incumbents. That’s more than two pieces of mail for every constituent, and it amounts to an expenditure of $20,000 in each district. To put that number in context, a state representative is not doing too badly if his or her Committee-to-Elect averages $20,000 over the course of an election cycle. Of the twenty candidates selected for targetting by Mass Fiscal, eighteen were re-elected, but the mailings had succeeded in delivering their threat.

So you can imagine that the Democratic members of the House were not happy to find two recent missives to their inboxes delivered by Mass. Fiscal: one on the urgent need to provide MBTA management with “relief” from the onerous (which is to say, union-friendly) Pacheco Law, and the other on the urgent need for another sales tax holiday this year. Their letters to House members are at the end of this post (click to enlarge).

Mass. Fiscal’s June 24 letter on the Pacheco Law begins with a flex of its 2014 monetary and electoral pecs (95,837 pieces of mail per district) and then goes on to express its considerable disappointment that the Legislature’s Transportation Committee failed to provide the MBTA with relief from the Pacheco Law. What the letter fails to acknowledge is that the full House had already included that relief in the annual budget it passed two months earlier. (Note that the Herald editorial quoted approvingly in the letter does acknowledge the House budget action on the Pacheco Law.)

Therefore, with Mass. Fiscal having proven its commitment to misinformation, it would not be surprising if House members chose not to buck them on the sales tax holiday. If you’re a state rep with reason to think a “no” vote will later be used against you in an unscrupulous fashion — recast, perhaps, as a vote to tax veterans so that immigrants can go on a holiday, why bother?

Happy shopping.



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