Comments on: I Can Say This Much for Cash for Clunkers http://www.showmedaily.org/2009/08/i-can-say-this-much-for-cash-for-clunkers.html Advancing liberty with responsibility by promoting market solutions for Missouri public policy Thu, 24 May 2012 00:36:33 -0400 http://wordpress.org/?v=2.8.4 hourly 1 By: Christine Harbin http://www.showmedaily.org/2009/08/i-can-say-this-much-for-cash-for-clunkers.html/comment-page-1#comment-3383 Christine Harbin Wed, 26 Aug 2009 16:03:03 +0000 http://www.showmedaily.org/?p=6350#comment-3383 Although I agree that sales tax holidays and Cash for Clunkers are effective programs for getting consumers to spend on targeted items, I think the similarities stop there. Programs like Cash for Clunkers are subsidies and they represent a cost to the general fund. Sales tax holidays, however, do not need to be funded by taxpayers; the government simply takes in no tax revenue. In addition to diverting wealth from other uses, these programs steal from future sales that would have occurred anyway. Although the program spurred economic activity in the short term, it is unlikely that this activity will continue into the near future. Related to this idea, Harvard Business recently called Cash for Clunkers an economic, environmental, and administrative failure for American taxpayers. http://blogs.harvardbusiness.org/quelch/2009/08/how_cash_for_clunkers_failed_a.html. Although I agree that sales tax holidays and Cash for Clunkers are effective programs for getting consumers to spend on targeted items, I think the similarities stop there. Programs like Cash for Clunkers are subsidies and they represent a cost to the general fund. Sales tax holidays, however, do not need to be funded by taxpayers; the government simply takes in no tax revenue.

In addition to diverting wealth from other uses, these programs steal from future sales that would have occurred anyway. Although the program spurred economic activity in the short term, it is unlikely that this activity will continue into the near future.

Related to this idea, Harvard Business recently called Cash for Clunkers an economic, environmental, and administrative failure for American taxpayers. http://blogs.harvardbusiness.org/quelch/2009/08/how_cash_for_clunkers_failed_a.html.

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