Comments on: Why not a tax holiday?

By: Potato

Potato — Sat, 31 Jan 2009 18:17:51 +0000

I think the problem with a tax holiday is that while it’s cheap to administer, it’s not cheap overall: the stimulus money gets diluted when it’s spread out across every Canadian and then doesn’t have much effect overall. Billions and billions can go out the door (or rather, not come in in the first place), but only minor effects are felt in individual household budgets.

Instead I think stimuli should be targeted to have a big impact in some areas, hopefully the ones that will help lead us out of a recession/depression (and if not, at least give us some swanky infrastructure to show for it). You know, get the banks lending, the factories producing, and the construction crews working, and hope that they will in turn take care of the accountants, lawyers, bloggers, and bakers.

By: SC

SC — Sat, 31 Jan 2009 03:38:31 +0000

The problem with a tax holiday or any temporary tax cut is that it is temporary. Since it is temporary, people do not change their behavior. They would not spend more, because they know that tax holiday is not sustainable and will end in the future. At the same time, the government is accumulating even more debt than these stimulus package because there is no income.

By: 45free

45free — Fri, 30 Jan 2009 19:51:36 +0000

The problem with a tax holiday is that it is by definition temporary and temporary/one time items do not goose the economy as well as other methods.

By: Shaun Kester

Shaun Kester — Fri, 30 Jan 2009 16:12:23 +0000

I think you bring up an interesting point. I’m a big history channel watcher and it does seem like we just keep making the same mistakes over and over again.

When I’m not watching the history channel, I’m a software developer. I can say that while the idea of a tax free holiday sounds good in theory, in practice it may be impossible. Taxes are ingrained into the software that we use to buy food, gas, movies, and toys. If this kind of tax flexibility was not put into the system, the implementation of this holiday could be sporadic and uneven. Even if notice was given months in advance, many small businesses couldn’t afford to make this change.

I’m in Oregon, USA; so we don’t have a sales tax here. Of course, I received our stimulus checks last year, but all we did with that was pay down debt. We were ‘bad’ in the sense that we didn’t use it for stimulating the local economy by spending it on consumer goods that we didn’t really need anyways.

I’m not sure that stimulus checks or tax holidays are the answer for either of our countries. I’m sure the only thing we can agree on is that something must be done.