I was talking with some folks at LSU who were working on a proposal to exempt textbooks from sales taxes in Baton Rouge, currently a whopping 9 percent. I’m all in favor of cutting sales taxes, which are generally not progressive; but textbooks are a luxury good because college education is disproportionately undertaken by the offspring of higher-income families. Why subsidize higher-income college students still further?
The elasticity of demand for textbooks is probably quite small; profs assign the same number of textbooks and students used to buy them locally. With more students purchasing textbooks online today, the elasticity is probably much higher locally. There was little excess burden before; and with the expansion of the Internet the burden is still small, since people can escape the tax with minimal effort.
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Until a $100 textbook is used more than a handful of times by the assigning professor and/or is worth more than $20 when being bought back by the bookstore, I’m all in favor of tax breaks on textbooks.
Maybe then, all those college students that don’t fit into the majority can afford more than Ramen noodles.
How can you claim that “with the expansion of the Internet the burden is still small, since people can escape the tax with minimal effort”? Buying an object out of state and importing it without paying the use tax (which comes out equivalent to the sales tax, of course) is against the law. You’re basically saying “the burden on students is small because the students can break the law to escape it”. Huh?
“higher-income college students”
I don’t know many college students who have any significant amount of income; I sure didn’t. They may have some kind of deferred wealth in the form of an inheritance, but that does not mean they are currently rich or higher-income.
Even if college education is disproportionately undertaken by the offspring of higher-income families, a tax exemption would be more beneficial for for lower-income students as it leaves a higher percentage of their income available for other things. The $45 or so of tax added to the purchase of text books will have much less impact on students whose wealthy parents pay for their books than students who have to work to pay their own way though school. If this tax break were aimed at higher-income students it would be directed only at new text books which are more expensive instead of indiscriminately subsidising everyone. The tax exemption is probably more of an attempt to keep students spending in Baton Rouge instead of Seattle (Amazon’s HQ). Furthermore, I think of this tax exemption as a tax break on education, not a subsidy for the rich, and I certainly have no issue with encouraging education.
@Michael(#2): actually, the 9% is the local sales tax rate here in BR, so it is not just the textbooks that are getting taxed heavily.
How about doing away with textbooks altogether?
In most cases, the exact same information that is contained in a textbook is available for free somewhere on the internet.
Textbooks are an obscene racket. I’ve been buying them for the past 14 years as my kids went to private school and then college. Every couple years a new edition appears which means parents/school districts are “required” to buy so they have the most up to date information. Complete nonsense! I would be happy to spend a few bucks for an update which could be downloaded.
My first place to go to buy textbooks is “used” on line. There are many companies around. I don’t pay any tax.
Not spending big $$$ on new textbooks is a way every school in the country can save money. If your kids go to public school, you probably have no idea how much money your school spends on books. I encourage you to ask. You will be surprised.
Anyone who pays local sales tax on a textbook is just being doubly stupid for A) paying retail price at a brick and mortar store and B) getting charged sales tax on the same.
Buiy online, used or peer to peer and not a cent in tax you will pay. A sales tax exemption for textbook sales is about as useful as a chocolate teapot. I have no problem on taxes that punish stupidity and this is no exception.
(BTW, this proposal was probably suggested by bookstore lobbying groups that are being devastated by online sales and has little to do with helping actual taxpayers.)