are tax holidays effective 
the net benefit of tax holidays is still up for debate on the one hand even though the government loses out on tax revenues that would have been generated from sales during the tax holiday such tax breaks may increase revenue over the long term because they stimulate spending and investment in addition the lost tax revenue may be offset by consumers increased purchases of items in product categories that are not affected by the tax holiday 7on the other hand increased sales during a tax holiday may be preceded by reduced sales because consumers know they ll save money by waiting thus the tax holiday simply shifts sales that would have happened before or after the holiday to the holiday dates one study found that a weekend long broad sales tax holiday in massachusetts increased spending in the state over the entire month and relative to that in neighboring states 7some retailers may take advantage of tax holidays by raising their prices effectively pocketing some of the subsidy intended for consumers perhaps not coincidentally retailer groups have been among the strongest advocates of sales tax holidays while lawmakers in several of the states that have offered them in the recent past have grown more skeptical of the concept 8