Student’s dream: The proposed “tax holiday” by Wisconsin Republican gubernatorial candidate Mark Green would be of the greatest use to college students, who by far spend the most money on their educational supplies without benefits to their disposable income. The proposal would exempt textbooks, writing supplies, technological aides and other instructive necessities in order to support the educational desires of students and tax payers without concern that this source of funding ” the tax-exempt savings ” would be otherwise directed to noneducational expenses.
According to Marquette?s own Tuition and Costs estimation for the 2006-2007 academic year, the average college student will spend approximately $900 on books; in addition, $1,350 will be allocated for personal expenses excluding clothing. Therefore, it is possible to spend $450 for textbooks and $675 for personal expenses during the first semester of the academic year during the tax holiday.
For example, the tax exemption would apply to clothing and shoes under $100 individually. If a student would purchase a $100 pair of shoes during the tax holiday, his or her total cost savings at the 5.5 percent sales tax in Milwaukee County would be $5.50. If this same student purchases three pairs of shoes at $100 each, then his or her total costs savings for three pairs would be $16.50. Factor this cost savings into other purchases such as clothing, personal computers not exceeding $1500 and textbooks during the first academic semester, the total cost savings for a student who spends roughly $3,000 on these expenses would be approximately $165.
The total cost savings used in this example can be considered ?modest? in terms of the actual estimates of cost expenditures. However, the main counter-argument is that the state could potentially lose as much as $10 million in revenue by instituting the tax holiday, effectively negating a tax savings of $165 as stated in the previous scenario for college students. Although it is true that the savings might seldom exceed $20 for the average family with K-12 students, in the thirteen states and Washington D.C. where the tax holiday has been implemented, it has not been a financial burden large enough to repeal it.
Thus, this is not a recent phenomenon without staying power. New York state implemented the first school tax holiday in 1997, it has prompted other states to respond in kind in addition to offering sales tax breaks on other items as part of their fiscal plan. Mark Green also claims that the tax holiday would lead to increased retail commerce from across state borders; to whatever degree this might be true, the larger benefit of the tax holiday is for the citizens of the state, especially college students.
In the final analysis, every college student could benefit from an average extra $165 at the beginning of the academic year. Most college students could find better ways to spend these savings than stuffing the state?s coffers.