Project Destiny's proposed three county local option sales tax increase is 16.7% to its opponents and 1 cent to its proponents. Both are correct but its proponents have correctly decided that a 16.7% increase in any tax would be a hard sell. A 16.7% increase in, say, income tax would not get out of the starting blocks but as the poor pay more of their income in sales tax than they do in income tax that is in effect the prospect they face.
A similar semantic problem arises with that perennial promise, "property tax relief." A common (and common sense) interpretation suggests that you will pay less after relief than you are paying now. But for our elected officials it simply means that your next increase will be less than it would otherwise have been. And there is no way under Iowa law to make the promise of a "dollar for dollar" reduction in property tax binding on the many taxing jurisdictions involved. "Trust us" is not exactly a convincing argument. And "Trust our successors" even less so. The Des Moines City Council’s devotion to property tax relief is particularly suspect given its annual pilgrimage to the statehouse to lobby the legislature to remove the cap on property tax.
The proposal, like Caesar's Gaul, is divided into three parts.
The first third is the property tax relief referred to above. If it does materialize it will provide a windfall for federal and local governments; property tax is income tax deductible - sales tax is not. It is unclear how all this is to work for homeowners and a clearer explanation would be helpful but if it is indeed "dollar for dollar" it appears that those in the lower tax suburbs might well get a higher percentage relief than those in high tax Des Moines as would those who live in partially abated homes no matter where they live.
The next third is to finance projects that would normally be paid for by property tax and is being characterized by some as also being property tax relief. This is a bit of a stretch. This is new money for new projects and is clearly a tax increase. To be fair the drafters of the proposal acknowledged that when they did not include it with the property tax relief of the first third.
The last third is perhaps the most controversial of all, a $20 million dollar slush fund to enhance the local "quality of life." I prefer to decide for myself what enhances my quality of life rather than have others decide it for me and I suspect that most traditionally individualistic Iowans feel the same way.
Mandated in this third is the Holy Grail of the Des Moines City Council, property tax equalization with the suburbs. 20% of the final third will be distributed to the various jurisdictions based on the amount of tax exempt property they have. This means that Des Moines will get most of it.
The fund will be administered by a committee of fifteen appointed by elected officials. We have recently seen how well that works. Nine will be from Polk County, three from Warren and three from Dallas. This is no doubt logical based on present population ratios but as a practical matter it gives Polk County de facto complete control. Non-budget decisions (whatever they are) will be by a simple majority of eight so here Polk County can do what it likes. Budget decisions (distributing the money) require a two thirds majority of ten. All Polk County has to do is to cut a deal with one of the representatives of Warren County (the poor relation of the trio) and Dallas County will have no say in where its money goes.
Some have already spotted a potential danger in passing this measure, its effect on the renewal of the local option sales tax for schools which is looming on the horizon. There is a limit to the public’s appetite for sales tax increases and there is already smoldering discontent with broken promises and questionable expenditures in this area. If Project Destiny passes, "enough already" might well be the reaction when school tax renewal comes up.
We should be able to disagree without being disagreeable and I have no doubt that the Project Destiny leaders have the best of intentions but as my mother never tired of pointing out, "The road to hell is paved with good intentions."
Friday, August 18, 2006
Friday, August 04, 2006
Never give in
Project Destiny, the new sales tax / property tax relief / community enhancement plan is still around and may be back with us next summer in a special election. It is critically important that all middle to low income homeowner and all renters fully understand the negative affect this plan will have on their personal finances and work towards its defeat.
As the Project for Destiny Plan now stands, expect the following financial impacts:
• If you are a homeowner (property taxpayer) with a home with a market value of about $225,000 or less in Des Moines, you will see lower property taxes and a sales tax that is higher than your tax reduction. – You lose.
• If you are a renter, your landlord will receive property tax relief. He will be free to pass it along to you if he wishes. Will he? You’ll get a new sales tax. – You lose big time.
• If you are a child, teen or homeless, what you buy including meals, pop, candy and clothing will be taxed at a higher rate. – You lose too.
Who else looses? The community does because what I just described above is called regressive taxation, taxing the people with less ability to pay than those with more ability to pay. Although the promoters of this plan call it a “property tax reduction plan”, most people will actually pay more taxes in total!
Please ask your local leaders about how they learned about the full impact of this program? Ask them if comparisons have been shown which illustrate how the plan will affect the various economic groups in the community, especially big business and low income folks - an economic impact statement if you will.
As the plan stands it is a bad deal for most residents, even those who think of themselves as middle class. Even if they were to “break even” by having their property taxes lowered and then equally offset by the new sales tax, they would be hurting their community. Why, by increasing the taxes on people with less than they. This is just morally wrong.
I don’t see that it is ever, ever right to put people who have lower incomes than you into a worse financial position than they were before. That goes not only for this current tax question but also to many other areas of our community that prey on financially weaker people.
The true strength of a community comes from its people and their total value systems including spirituality, not from feeding government’s incessant greed.
There will always be folks with blinders on, folks who want the easy choice, folks who will vote the politician’s line. We have it within ourselves as individuals, families, communities, cities, counties, states and a great nation, under God, to never do that again.
Please stand in opposition to Project Destiny. If you are offered a petition, don’t sign it. If it goes to the ballot, take the time to vote NO. It’s just not a good idea.
As the Project for Destiny Plan now stands, expect the following financial impacts:
• If you are a homeowner (property taxpayer) with a home with a market value of about $225,000 or less in Des Moines, you will see lower property taxes and a sales tax that is higher than your tax reduction. – You lose.
• If you are a renter, your landlord will receive property tax relief. He will be free to pass it along to you if he wishes. Will he? You’ll get a new sales tax. – You lose big time.
• If you are a child, teen or homeless, what you buy including meals, pop, candy and clothing will be taxed at a higher rate. – You lose too.
Who else looses? The community does because what I just described above is called regressive taxation, taxing the people with less ability to pay than those with more ability to pay. Although the promoters of this plan call it a “property tax reduction plan”, most people will actually pay more taxes in total!
Please ask your local leaders about how they learned about the full impact of this program? Ask them if comparisons have been shown which illustrate how the plan will affect the various economic groups in the community, especially big business and low income folks - an economic impact statement if you will.
As the plan stands it is a bad deal for most residents, even those who think of themselves as middle class. Even if they were to “break even” by having their property taxes lowered and then equally offset by the new sales tax, they would be hurting their community. Why, by increasing the taxes on people with less than they. This is just morally wrong.
I don’t see that it is ever, ever right to put people who have lower incomes than you into a worse financial position than they were before. That goes not only for this current tax question but also to many other areas of our community that prey on financially weaker people.
The true strength of a community comes from its people and their total value systems including spirituality, not from feeding government’s incessant greed.
There will always be folks with blinders on, folks who want the easy choice, folks who will vote the politician’s line. We have it within ourselves as individuals, families, communities, cities, counties, states and a great nation, under God, to never do that again.
Please stand in opposition to Project Destiny. If you are offered a petition, don’t sign it. If it goes to the ballot, take the time to vote NO. It’s just not a good idea.
“Never give in, never give in, never; never; never; never - in nothing, great or small, large or petty - never give in except to convictions of honor and good sense” – Sir Winston Churchill
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