Nationwide Sales Tax Holiday: A 'Cockamamie' Idea.

• Author: Peirce, Neal R.
• Position: Commentary - Brief Article - Column

Just when the country ought to be getting serious about its economic security, along comes the proposal that Washington decree a 10-day national sales tax holiday.

States and localities, promised later federal payback, would be free to take or reject the holiday (how, politically, could they refuse?).

The National Retail Federation is red-hot for the idea. A group of senators ranging from Patty Murray, D-Wash., to Rick Santorum, R-Pa., have endorsed it. And the White House is reportedly interested. One can easily see the holiday ending up in the economic stimulus bill that's still being debated by Congress.

But Camille Barnett, former city manager of Washington, Austin, and other cities, tags it a "cockamamie" idea-- "Why take the best shopping days of the year and give away the taxes on them?"

What's more, Barnett suggests, consumers might simply hurry to buy big-ticket items where sales taxes really matter--autos, furniture, and the like--and then curtail their spending afterward.

The cost wouldn't be trivial: $6.5 billion out of the federal budget. Barnett also predicts months of payment delay and administrative confusion for states and localities.

The timing is unfortunate--just when a tidal wave of terrorism-fighting costs is looming. For Washington, that means the war in Afghanistan and maybe elsewhere, purchasing baggage-screening machines, hiring air marshals, adding FBI agents to track terrorists, finding supplies of vaccines and Cipro to deliver nationally, demands for radically increased border controls, more INS agents to track visa offenders--the list seems truly endless.

View it all from the state and local angle and more doubts surface. Most state budgets are already skirting red ink because of sharp revenue drops--at the very moment states must contend with new security outlays for guarding bridges, nuclear power plants, and more.

Cities, in a way, have it even tougher in a nation newly vulnerable to terrorism and the thousands of scare reports it generates.

"911 generates a call to the local police and firefighters--that's where the response comes from," Tulsa Mayor Susan Savage observed on the "The NewsHour with Jim Lehrer" last week. Atlanta's Mayor Bill Campbell cited "enormous costs associated with the 24-hour around-the-clock security" that cities must now provide.

And the long-term impact, Philadelphia Mayor John Street notes, will go far beyond overtime costs for police, firefighters, and medical emergency personnel...