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18 October 2010 @ 03:24 pm
Math is not *that* hard, people  
Pop quiz: what's wrong with the logic here? (Emphasis mine.)
Robert Gaudette is tired of watching customers shop for wedding dresses at his South Attleboro store then drive across the border to Rhode Island to save the 6.25 percent in Massachusetts sales tax.

For a $15,000 dress, the tax savings would be $937.

"The shops in Rhode Island who sell the same dress that we do, don't have to charge any sales tax," said Gaudette. "They use that as a selling point."

So it's no surprise Gaudette supports Question 3, the voter referendum on the November ballot that would cut the state sales tax to 3 percent from the 6.25 percent levy the Legislature raised it to in August 2009.
-- Selling the sales tax cut, The Sun Chronicle (Attleboro, MA, US)

Do you see the subtle problem with the connection they've drawn? Hint: changing the tax rate in Massachusetts does not change the tax rate in Rhode Island. So: They claim it's "no surprise" the shop owner supports watching his customers continue to shop elsewhere, as long as they save only half as much (such as $450 rather than $937, using their example) by doing so.

(That's ignoring the run-on opening sentence; tSC is routinely a copyeditor's nightmare. Also, a $15,000 dress? *cough*)

I'm having a good bit of trouble figuring any product line/price-point for which the 3.25% saved by a sales tax reduction would be enough of a difference-maker to outweigh the additional 3% saved by a short drive. So: I find the shop owner's support mystifying, frankly. He's supporting continuing to lose business, impoverishing the state and thereby state aid to his city, likely therefore raising his business taxes, and diminishing public pressure to eliminate the sales tax entirely. I would be unsurprised if the shop owner supported that last; but the writer of this article fails to make his example case make any sense at all.


Originally posted at Dreamwidth | Comment | comment count unavailable comments
 
 
Current Mood: annoyeddisgusted
Current Music: "Nothing from Nothing Leaves Nothing", Billy Preston
 
 
 
just a guy made of dots and lines: kronkcrs on October 18th, 2010 08:02 pm (UTC)
Maybe for someone who is buying a $15,000 wedding dress, $450 is just below the threshold for having to go to all the trouble of driving to Rhode Island for their dress, while $937 isn't. The wedding-industrial complex have put a number on EVERYTHING that a bride thinks!
michelel72: DS-Quote-TeachToCowmichelel72 on October 18th, 2010 08:24 pm (UTC)
Honestly, if they consider it a matter of course to drive fewer than two miles to save $937 but not $450? My heart kind of fails to bleed for them, y'know? (Then again, I'm not exactly weeping for folks willing to spend $15k on a wedding dress anyway, so.)
just a guy made of dots and lines: kronkcrs on October 18th, 2010 08:30 pm (UTC)
Ah, but this isn't about weeping for the buyer, it's about weeping for the store owner.

There are always examples of this kind of problem, though, at borders. See also how people drive to Buffalo or to Canada for stuff. The real issue here is, this has been the situation for this long, and the dress store is still in business. What has changed recently? Did Rhode Island recently drop their tax?

Maybe we should institute a state-issued credit, to get people from NH to come across the border to buy their stuff here. I'm sure that would make these people happy!
Amy- ninja extraordinaire, bad monkeyninjamonkey73 on October 19th, 2010 12:02 am (UTC)
Also, the RI sales tax on all-things-NOT-clothes is 7%. We used to drive the couple of miles to MA to save 1.5%. Srsly. Only clothing and unprepared food is nontaxable in RI, so how the frak many $15,000 dresses are people buying? He loses one sale in how many? Cripes, I bought my gown at a sassy (RI) bridal boutique and only paid $800 (and thought I paid too much!). That is wrong on so many levels. Especially the loss of funding and no gain in keeping sales in MA...
sings and wandersvioletcheetah on October 19th, 2010 01:45 am (UTC)
Also, I'm presuming that the only reason the 15K dress is taxable in Massachusetts, where all the clothing -I- buy is untaxed, is that it's over some threshold into the "luxury" realm.