Murray says ‘tax holiday’ would help the economy

Associated Press

WASHINGTON — State sales taxes nationwide would be halted for 10 days during the holiday shopping season to boost the economy under legislation planned by Sen. Patty Murray, D-Wash., and Sen. Olympia Snowe, R-Maine.

In Washington state, the tax holiday would have to be authorized by the Legislature, which doesn’t convene until January, said state budget director Marty Brown. But Tuesday night, Gov. Gary Locke said he was willing to call a special legislative session to adopt the tax-free holiday if Congress agrees to fully and quickly reimburse state and local governments for their revenue losses.

The two senators are working to have their proposal, which is expected to be introduced today, included in Congress’ economic stimulus package. It would give states the option to suspend their sales taxes to encourage people to open their wallets before the holidays.

Murray and Snowe want the federal government to pick up the tab for the lost revenue — roughly $6.5 billion, according to some economists.

Murray said the proposal is just another incentive at a time when some of the nation’s leaders are telling people that it’s their patriotic duty to head to the stores and strengthen the economy.

She calls it the "let’s go shopping" bill.

Kevin Hassett, resident scholar at the American Enterprise Institute, a conservative think tank, said he doesn’t think the tax holiday has much of a chance. There’s a fairness question, since five states don’t have sales taxes, and he expects some Democrats to argue that the tax holiday would help the rich more than the poor because the rich spend more.

Murray and Snowe propose their tax holiday from Nov. 23 to Dec. 2, which would include two weekends and the day after Thanksgiving, normally one of the busiest shopping days of the year.

Copyright ©2001 Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

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