For starters, the taxes on back to school items don't amount to much in terms of savings. A spokesman from the National Retail Federation put it bluntly: "If retailers said everything is on sale for 5 percent off, people would laugh."
The states that currently host tax holidays have sales taxes that range from 4 percent to 7 percent, and this doesn't include city and country taxes. Retailers play into the general public's distaste for taxes to make them think they're getting a good deal.
In response to the increased traffic spurred by tax holidays, many stores actually wind up raising their prices over these weekends. On average, a University of Western Florida study found, clothing prices increased by one fifth of the savings consumers would have received on the tax holiday during 2001.
One by one, states have adopted tax holidays to encourage more shopping and ultimately generate more revenue in light of the rush caused by the back-to-school season. If you're in the market for school supplies this month, be sure to do your homework and look for the real deals.