Sales Tax Holidays: Helping or Hurting Consumers and Businesses?

Eighteen states are offering sales tax holidays in 2010, up from 16 in 2009 and 17 in 2008. Many consumers regard tax holidays as a great opportunity to save on necessities and products that improve their safety or reduce their carbon footprint.

The Tax Foundation, a nonpartisan, nonprofit organization monitors fiscal policy at the federal, state and local levels, provides another prospective.

The Foundation released a report on July 26, concluding that tax holidays are, in fact, bad public policy, distorting consumer choices while favoring certain industries over others, increasing tax code complexity, and distracting from real, permanent tax relief.

What are your thoughts? Are tax holidays friend or foe? Are there ways they can be better implemented to achieve the goal, or are they working just fine?