SULLIVAN'S SALVOS
June 26, 2014
Sullivan’s Salvos 7/1/14
In this edition:
*Happy Independence Day!
*Save The Date!
*Sally Hoelscher
*More Sales Tax
*Did You Know?
*Happy Independence Day!
Happy Birthday to the USA! 238 years old and going strong! I hope you and yours enjoy a great Independence Day!
Looking for ways to celebrate? The Jazz Festival is in downtown Iowa City July 3-5, and the 4th has parades in Coralville, Sharon Center, Oxford, and Hills.
*Save The Date!
As many of you know, Melissa and I went to Haiti in April with a group called Community Health Initiatives (CHI). The work this group is doing is beyond description here. So we want to continue to help.
With that in mind, we would like to invite you all to this fundraiser. It just so happens that it is our anniversary the day before, so we would love to spend the night with old friends and CHI friends, all helping a great cause!
We'd be honored if you would join us! Details are below; you can buy tickets at www.chihaiti.org. Feel free to call Melissa or I with questions.
Saturday, August 2nd 6:00-10:00P (Dinner served at 6:30P)
2nd Floor Hotel Vetro.
Dinner, live music, silent auction and cash bar. $50 investment per ticket ($20 is tax deductible). Open to the public. Formal attire suggested
*Sally Hoelscher
ICCSD Board President Sally Hoelscher is stepping down from her position for “personal reasons”.
It is quite unusual for this to occur. I seem to recall former Board member Mike Cooper resigning early because his employer transferred him out of state. I may be slightly off on those details; anyway, an unfilled term is a relatively rare thing.
So what to make of it? I say nothing. Ms. Hoelscher has spent the past three years in the most thankless of jobs. She has been subject to unfair criticisms and downright vile accusations. I have not always agreed with her, but I certainly respect her service.
In that spirit, I’m not going to question her reason(s) for leaving. Her personal business should remain her personal business. I simply hope her and hers are OK, I wish her well and I thank her for serving.
There are many challenges ahead in the ICCSD. Let’s move forward in addressing them – and try to do so while treating each other with some respect.
*More Sales Tax
As many of you know, I am a bit of a wonk when it comes to taxes. My interest in this area has led to some strongly held opinions against sales taxes. Here are a few reminders as to why increasing our reliance on the sales tax is NOT a good idea. (Much of this is from an earlier edition of Salvos.)
This means that the poor pay a higher percentage of their income in taxes than do the wealthy. Sales taxes are the most regressive taxes. Income taxes are the most progressive taxes.
In 2003, a person with an income of $90,000 paid 3.2% of her income in taxes. A person earning $19,500 paid 11.1% of her income in taxes.
Relative to income, the poor pay twice what the middle class pay, and nearly 5 times the amount the wealthy pay. Even with exemptions, sales taxes hit the poor hardest.
Who are the poor?
31% (215,855) of the children in Iowa live in low-income families. 10% (70,857) of the children in Iowa live in poor families. Most of the people living in poverty in Iowa and elsewhere are children. There are more poor women than poor men. Plus we are talking poverty here, which is a much higher threshold than free and reduced price lunch.
Children are the poorest segment of our society. I will quote one of my favorite authors, Jonathon Kozol: “Charity is no substitute for economic justice.”
You cannot raise money for human services and believe they will make up for the damage done by a local option sales tax. Governmental agencies cannot improve their budget situations on the backs of the poorest of the poor. The needs of the poor will outpace any and all services that they have helped to fund.
In the Iowa City Community School District, parents and kids at Twain, Wood, and Hills pay a higher percentage of their income in sales taxes than parents and kids at Wickham, Lincoln, and Shimek. Does this make sense?
Wealthy services not taxed
The services of accountants, attorneys, and stockbrokers are not subject to sales taxes. These and many other services (advertising, consulting, etc.) used primarily by the wealthy and by large corporations go untaxed. In addition, property taxes are deductible, while sales taxes are not.
“Sales tax proponents frequently use the argument, “Sales taxes are better than property taxes.” First off, this is untrue. This argument is akin to saying, “Drinking is better than smoking, so we need more smoking.” Neither tax option is good for the poor.”
Sales taxes versus property taxes is a red herring. The point is not which is worse, sales taxes or property taxes. The point is that BOTH hurt the poor unfairly. We need to create a more fair system of taxation, and we need to do so creatively. Sales & property taxes are not the only two options available. People who claim these are the only options are being shortsighted. We need to challenge our legislators to allow for greater local use of income taxes. This is the fairest way to finance local governments, and should be part of the mix.
Rent includes the landlord’s expenses plus profit. But there is no profit if there is no renter. So depending upon the market, the landlord can adjust her rent as much as she wishes, so long as the unit remains leased. Most landlords raise rents when they can, regardless of taxes. Most try to squeeze out maximum profit. This is supply and demand and will happen REGARDLESS of taxes. Supply and demand drives the rental market-nothing else. This is a fact, and economists of all stripes have backed this up. So before you E-mail me disagreeing with this fact, talk to a damned economist!
Another flaw in this argument is assuming that landlords are somehow entitled to no less profit than they are currently receiving. Owning property is an investment. People are not forced to own – they can invest in CDs, gold, or the stock market. If your investments are not profitable, sell.
Programs that use relative wealth as a measure of eligibility (such as Medicaid) always include resources (property). It is not enough to have low income; you must also lack other resources, such as property. This is because the net worth of a property owner far exceeds that of a renter. Renters have less real assets. Under a sales tax, renters pay the same as their counterparts with real assets.
People who live outside of Johnson County pay about 20-25% of the taxes collected. These are by and large not people from Chicago, however, but commuters who purchase goods on the way home.
I cannot, in good conscience, support a shift of the tax burden to people who have less money. What's more, I have trouble saying that a person earning $25,000 should pay more tax just because she lives in Williamsburg, Riverside, West Branch, Mount Vernon, Tipton, etc. Especially when the local wealthy would be let off the hook at her expense. It is critically important that we think of our middle and low-income neighbors who commute to this County.
In addition, there are “outsiders” who pay property tax; they are absentee landowners. Most of the buildings in downtown Iowa City are owned by people who live outside of Johnson County. Coral Ridge Mall, Proctor and Gamble, Regency Trailer Court, numerous student apartments, and thousands of other properties are owned by entities that do NOT call Johnson County home. Substituting sales tax for property tax lets these absentee landlords off the hook. Others will pay for the roads and services that add value to their properties.
Doesn’t everyone else impose a higher sales tax?
Yes. Currently, only Johnson County has no Local Option Sales Tax. When you are the only (or one of the only) counties that does something, you are either doing something very well or doing something very poorly. I believe Johnson County has been doing very well by choosing not to impose this tax.
I just happen to buy into a worldview that those who are able need to help those who are not. It is a basic organizing principle of any society, for one thing. Most major world religions subscribe to the idea of helping the poor.
I hold to a viewpoint (influenced by Christian doctrine) that says, “The last shall be first and the first shall be last”; “Do unto others”; “That which you do to the least among you, you do to me”; “The meek shall inherit the earth”; “Charity shall cover the multitude of sins”; “You cannot serve both God and wealth”; and “A rich man has a better chance of putting a camel through the eye of a needle than getting into Heaven.” Islam, Judaism, Buddhism, Hinduism, and most major religions share similar doctrine when it comes to caring for the poor first. If you think I am making these up, consult your own religious authority.
I prefer to follow this lead rather than doing more to comfort the comfortable.
*DID YOU KNOW? Money raised by CHI will be used to purchase medicine for patients of the clinics in Haiti.
Anyone interested in learning more about County government should take a look at the County website-
"Sullivan’s Salvos" is sent once per week to any interested party. It will give a brief update on issues of interest to Johnson County residents.
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As always, feel free to contact me at 354-7199 or rodsullivan@mchsi.com. I look forward to serving you!
---Rod
posted by Rod Sullivan @ 2:51 PM
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