By: Bill Bosher
The "back-to-school" sales tax holiday ends today. While Virginia has three annual tax holidays, including October for energy savings and May for hurricane preparation, perhaps the most anticipated is the start of the school year.
Business owners tend to like the fact that shoppers are motivated to get out and buy something. School supplies and clothes are capped respectively at $20 and $100, but, having grown up in a retail business, the foot traffic is exciting and leads to purchases that have nothing to do with school…but not exempt from the 5.3% tax.
There are generally three kinds of taxes: progressive, proportional, and regressive. Federal income tax is progressive. The percentage that you pay goes up as your ability to pay increases. The theoretical opposite, a regressive tax, has the greatest impact upon those who can least afford it.
Removing sales taxes from prescriptions and food products tends to mitigate regressive qualities. With compulsory attendance, school supplies are no different. The poorest families are hit the hardest.