As students get ready to go back to school, families took to the mall for the start of a tax-free weekend on Friday and many were relieved for the tax break despite current inflation spikes.
Kari Stewart of Giddings went tax-free shopping with her three daughters at Post Oak Mall in College Station to look for new shoes.
“I always try to shop on tax-free weekend and it does help a lot,” she said. “It helps us because we are on a tight budget. The buy-one-get-one-half-off deals, plus the no tax added, is great for when you have multiple kids to buy for because it adds up really quickly. So, having discounts really helped a lot.”
Stewart said she has to budget carefully this year considering how high inflation rates have risen.
“Last year I think we did more online shopping, but this year [though] COVID is still around more people are out and about and trying to get back to normal life,” she said. “Tax-free items really helped a lot with that because everything else is so much tighter in our budget … considering everything we have seen that is going on with [inflation].”
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Prior to shopping for new shoes, Stewart said she and her daughters picked out new jeans and were able to save $100 from one store and $60 from another.
“If I were to have to pay for all of that up front it would really cut how many other things we could purchase for school,” she said. “I have just three kids, and I can imagine with five or six kids or how many other kids you add to that, how expensive back-to-school shopping can get. Even with one kid, it is just nice to have those discounts during tax-free weekend that we have that helps us save as much as we can.”
According to the Consumer Price Index calculator provided by U.S. Bureau of Labor Statistics [BLS], $500 in June 2021 has the same buying power as $545 in June 2022.
Dennis Jansen, director of Texas A&M University’s Private Enterprise Research Center, said inflation has been “unbelievably high” and has severely impacted people across the board.
“Wages have not kept up with inflation at least on average. The average person may have seen their wages grow but nowhere near as much as inflation; their purchasing power has decreased quite a bit,” he said. “Depending on which inflation measure you use, it has been 3% or 4% since January 2021, so tax-free weekend at least gives people a little over 8% reduction in what they would have to pay if they were paying taxes.”
According to BLS, from May 2021 to May 2022, the Consumer Price Index for all urban consumers increased 8.6%, the largest 12-month increase since the period ending December 1981.
The energy index rose 34.6% over the last year, the largest 12-month increase since the period ending September 2005, BLS reported. The food index increased 10.1% for the 12 months ending in May, the first increase of 10% or more since the period ending March 1981, according to BLS; and shelter prices rose 5.5% over the last year, the largest 12-month increase since the period ending February 1991.
Jensen said prices have gone up way faster than wages in the last couple months relative to earlier in the year.
“What is happening to inflation nationally is also happening locally. … I am sure families are looking for some kind of relief with rising prices and even though the tax free is temporary, I am sure it is a welcomed relief,” he said. “Some people may think, ‘Well, you are cutting taxes and that is 8.5%,’ but that is actually what inflation has been year over year from a year ago. You are basically only restoring the value of a $1 to what it was a year ago. …Inflation is rather difficult on most people, maybe on everybody.”
Roger Winckler, local leasing and advertising manager for Post Oak Mall, said he believes families are trying to save as much as they can this year, and retailers are trying to provide better deals especially during tax-free weekend.
“I think a lot of people have been putting money in the piggy bank to try and get ready to come back for back-to-school shopping,” he said. “A lot of the retailers are really anxious and are putting their best foot forward to try and make sure that they look good and have good product for everybody.”
Winckler said he heard some customers were unaware tax-free weekend started Friday.
“We have had confusing dates come out of the mouths of some of our retailers, and we have tried to educate as best as we can that this is the tax-free weekend,” he said. “Luckily some of the retailers had some shoppers last week find out it was tax free and waited to purchase, so it has been a mixed bag all around.”
Regarding inflation price increases at the mall, Winckler said this summer has been slow for customer shopping, but retailers are hoping to pick back up once school starts.
“I think there have been a little bit more tight purse strings now than in the past, and coming out of COVID and everything else, we are really interested to see how this back-to-school season plays out,” he said.
Maria Rizo of Navasota started back-to-school shopping for her 7-year-old son, Dixon Pereyra, to find him new red shoes he had been wanting.
“I knew it was tax free this weekend, so I wanted shop for school clothes and shoes for my son,” she said. “This helps a lot because kids are expensive, and with our budget it is really helping us. … I want to encourage [families] to come out and shop; it is busy, but it’s worth it.”