In for a Penny

Abe

I remember a lunchtime trip to Quizno’s on MLK near Gated Community Brad’s old apartment where the main topic of discussion was taxes. I paid about $5 for my chicken carbonara, and an extra 30 cents in taxes. A wealthy CEO would have paid the same, as well as a homeless, jobless single mother of three. What got us on the subject of taxes was the recent (to us, at least) proposition of the FairTax.

It was one of the most thoughtful and informative conversations I can remember we had that wasn’t about physics. But this post isn’t about the FairTax, at least not directly. The main result I remember from that lunch was my strengthened opinion that the sales tax without rebate is the most regressive, unfair sources of income for a government. To hit all people, regardless of economic status, the same for essential needs is just wrong to me.

So it’s with a bit of apprehension that I’m faced with an election question in November. The county is proposing an increase of the local sales tax by one cent, which I am morally opposed to, and lowering property taxes. The net effect to residents, it is claimed, would be zero. However, my university would be a direct beneficiary of such a tax increase, and I’ve been told by my superiors in no uncertain terms that the desperately-needed expansion and renovation of my building hinges upon the question’s passage.

Complicating the dilemma is the fact that the county has a huge tourism industry. It is expected that the brunt of this tax would be felt by out-of-towners… but is that fair? It would be selfish for me to hope for a downswing of the tourism industry, but that might weaken the overall local economy. And Myrtle Beach caters to many lower-income vacationers themselves.

And what of long-term renters, like me? We don’t pay property tax on land or houses, so our net tax burden would increase. Surely landlords would not pass the savings completely onto lessees. So my personal interest in voting “yea” is diminished.

I don’t know how I will vote. I have a month to figure it out. Some have counselled me to consider the morality and ignore the potential rewards. Would I lose sleep over voting for a sales tax increase? Likely not. But at what point should one start playing the balancing game?

Stay tuned. It’s still 50/50.

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4 Responses to In for a Penny

  1. Dr.Vermin says:

    Well, all the serious FairTax proposals I’ve seen certainly include significant income-adjusted rebates and exemptions for necessities like food and whatnot.

    As for the local sales tax and the tourism industry, I have a real hard time imagining anyone changing their travel plans on the basis of a one-cent change in the sales tax. But that’s just me.

    MORE IMPORTANTLY… how do you get that link to your blog on Facebook??? Do you think I can figure out how to link my MySpace blog there too???

    šŸ™‚

  2. brianbunton says:

    You know, I realized that I’m having the same internal struggle in a slightly different way… gas prices. Personally, I’d love to pay less at the pump, but higher gas prices puts greater pressure on everyone to develop alternative fuels, which I think is a no-brainer as far as long-term benefits.

    Vermy, I didn’t say one way or another on the FairTax. šŸ™‚ And WordPress has its own FB application… who uses MySpace anymore?!

  3. jwambaugh says:

    Durham is considering a one cent tax increase on prepared food only (http://politics.mync.com/2008/10/durham-restaurant-owners-against-meal-tax/). It’s marketed as a luxury tax to pay for developing Durham’s cultural attractions (including a minor league baseball museum, sigh). Unfortunately, I don’t think eating out is a luxury for most people — since it seems like people are expected to work overtime and that families should have two incomes, a lot of people get by on prepared food. Ann and I actually have it pretty good since we enjoy cooking for ourselves, but having just shopped for a house I can tell you that full kitchens are no longer a priority for a lot of people. So while I’m for luxury taxes in general (reasonable ones) I’m having a hard time with this one. It doesn’t help that the Fishmongers crew is against it.

    The reason I mention the Durham tax is that for a lot of people Myrtle Beach is a luxury. So on one hand it doesn’t seem like people would only be paying the tax if the wanted to — they could go elsewhere. On the other hand, it’s not likely that the people paying the tax will see any sort of benefit from it, so it becomes less of a luxury tax (taxing disposable income for the betterment of their community) and more of a sin tax (taxing to discourage behavior). Seems kind of stupid to charge a sin tax for visiting a vacation-oriented town.

    Finally, I’m not at all a fan of the “FairTax”. It seems like it’s largely motivated by a dislike of the complicated tax code and the people we have put in charge of enforcing it — the IRS. I’ve seen several implementations call for eliminating the IRS altogether. I guess that would be fine if you wanted to live in libertarian fantasyland (also known as Africa) except that most FairTax implementations also call for some scheme for returning sales tax to people (a tax code). In order to figure out how much tax (revenue) needed to be returned to people, we’d need some sort of group of people (a service?) to do this. Since we’d probably want to avoid conflicts of interest, a government agency might bet the best approach. Since we’d likely want taxes to be handled within the US, this revenue service should probably be “internal”. All of this is my roundabout way of saying that hating the IRS for doing the job we, as citizens, have asked them to do makes no more sense than criticizing the police or military. Given that even proposals for eliminating the IRS require an IRS-like entity, the IRS performs a needed service and we waste too much time criticizing it. The tax code could certainly be rewritten — but by whom?

  4. brianbunton says:

    If anybody cares, I voted no, but it looks like it’ll pass regardless.

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