- The Washington Times - Thursday, September 27, 2001

D.C. Council member Harold Brazil wants to have another tax-free week in the city to help stimulate business and assure tourists of Washington's safety after the fear generated by the Sept. 11 terrorist attacks.
"There are some concerns … because terrorists would be interested in Washington because of its unique nature and the government officials that are here," said Mr. Brazil, at-large Democrat, who plans to introduce a bill for a tax-free week on Tuesday.
"So we've got to put out a very strong signal, very quickly that yes, it's safe here, and we have a healthy, vibrant environment with a strong economy, people are working, kids are going to school, and life is normal," he said yesterday.
The total financial impact of the attacks on Washington business is not known. But financial losses stemming from the closing of Ronald Reagan Washington National Airport are estimated at $5.5 million a day, according to the Greater Washington Initiative, a group that promotes business in the region.
"What does a tax-free holiday show? That we're open for business, we're selling and people are coming to buy," Mr. Brazil said.
The proposed tax-free holiday would start the Friday after Thanksgiving and last nine days, through the following Sunday. It would apply to personal items priced at $1,000 or less.
Mr. Brazil said he is reaching out to other council members to join him in sponsoring the bill, but he had not been able to reach anybody by yesterday afternoon.
Tax-free holidays are not new. But using them to boost consumer confidence is novel, said Charles McMillion, an economist who runs MBG, a Washington business-information firm.
"It's a way of getting people's attention," he said. "It's obviously going to hurt the city's tax revenue, but I think the city is really doing everything it can to get the attention of consumers and get them to start thinking about shopping again."
The District held its first tax-free holiday Aug. 3-12 to jump-start retail activity during the back-to-school shopping season.
Another seven states have had tax-free holidays, which typically cover apparel, footwear, accessories, and in some cases, computers.
"They have been extremely popular and successful," said Scott Cahill, vice president for government and industry affairs with the Consumer Federation of America. "Consumer reaction has been remarkable in the past. In some states like Florida, Texas and Maryland, the break has generated crowds usually only seen during the Christmas and holiday season."
Maryland has held its tax-free holiday Aug. 10-16 for the past two years. The state comptroller's office estimated that shoppers this year saved $6 million in sales tax, and produced between $85 million and $150 million in gross sales of clothing.
"This would be beneficial not only to consumers, but to the economy," said Mr. Cahill.
Critics of tax-free holidays argue that they don't actually increase sales but just shift them from week to week. They also say states lose too much money in tax revenue to make it worthwhile.
Supporters say the tax breaks have a ripple effect on local economies, as stores hire extra part-time workers and create additional corporate income-tax receipts.
Mr. McMillion said whether the city loses revenue or not is not the point.
"In this situation, it's very different, because people are so preoccupied with sorrow and anger that, as a gesture, I think it's a very positive step," he said.

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