SULLIVAN'S SALVOS
October 22, 2020
Sullivan’s Salvos 10/27/20
In this edition:
*More on Edith Hargrave
*Help Lonny Pulkrabek!
*Say No to Sales Taxes!
*Did You Know?
*More on Edith Hargrave
I wrote last week about the passing of Edith Hargrave of Iowa City, and it elicited an unexpected response. My good friend Greg Hearns, President of the Iowa City Federation of Labor and Business Agent for Teamster’s Local 238, called me up to tell me more about Edith.
As it turns out, Ms. Hargrave was a longtime member of Teamsters 238. She was active in Local 238, and also the National Black Teamster’s group. More importantly, she served as a mentor to many beginning workers, including a young Mr. Hearns.
I had no idea! Edith Hargrave always impressed me. My respect for her goes even deeper now. Thanks, Greg, for sharing!
*Help Lonny Pulkrabek!
Want to do something to help take back the Iowa House and help a great guy in the process? Please consider volunteering to help Sheriff Lonny Pulkrabek as he runs for HD73. Lonny needs people to call voters in Johnson and Cedar Counties. Please let me know if you can help, and I’ll put you in touch. Thanks!
*Say No to Sales Taxes!
The topic of a Local Option Sales Tax has come up yet again. I remain opposed to increasing the sales tax. Sales taxes are better for the rich, and worse for the poor. This is because sales taxes are more regressive than property taxes.
What is regressivity? 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.
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 more than twice what the middle class pay, and nearly 5 times the amount the wealthy pay. Even with exemptions, sales taxes hit the poor hardest.
So who are the poor? Most of the people living in poverty in Iowa and elsewhere are children. There are more poor women than poor men. 15% (105,000) of the children in Iowa live in poverty. Even more (42%) live in low-income families. Taken together, over half our children are poor. Sales taxes hurt them the most.
So who benefits? The biggest property tax payers in Johnson County will benefit the most. That includes: Coral Ridge Mall, Mid American, Hawk Landlord LLC, ACT, Green State Credit Union, and the Graduate Hotel. They benefit the most. Is that really what we want to do? Cut taxes on those businesses, and shift the cost to poor kids?
People like to talk about all the big things we could do with a sales tax. But we could do them right now with an increase in the property tax. That is correct. We can do it all with property taxes. Iowa City ranks #100 in property tax rate among Iowa’s cities at $40.77. That is lower than Des Moines, West Des Moines, Cedar Rapids, Davenport, and many other cities. Iowa City could do the things they want to do by simply raising property taxes.
Coralville ranks #145 in property tax rate at $39.33. Coralville could do the things they want to do by simply raising property taxes. North Liberty ranks #312 in property tax rate at $36.05. That rate has not been increased even a penny in a decade. North Liberty could do the things they want to do by simply raising property taxes.
This is just a matter of political will. Elected officials are afraid to ask the people with the actual money to pay more. So they squeeze the poor, who by and large don’t show up at Council meetings. If the project is so important, just do it with property tax dollars.
People talk about being “visionary”. Where is the vision that makes things better for the poor? If we cannot collectively get past the idea that we don’t want to piss off a few local rich people? Then we aren’t a group whose “vision” deserves a vote.
You cannot raise money for public projects on the backs of the poor and pretend they will be unaffected. The needs of the poor will outpace any and all services that they have helped to fund. Governmental agencies should not improve their budget situations on the backs of the poorest of the poor. In Johnson County, parents and kids at Twain, Kirkwood, and Hills will put more of their income toward a sales tax than parents and kids at Wickham, Lincoln, and Shimek. Does this make sense?
Another problem with the sales tax is that services used solely by wealthy people tend not to be 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 corporations go untaxed.
Sales tax proponents frequently use the argument, “Sales taxes are better than property taxes.” First off, this is demonstrably untrue. But even if it was true, this argument is akin to saying, “Drinking is better than smoking, so we need more drinking.” Neither tax option is good for the poor. But sales taxes are worse.
Some folks are under the impression that renters do not pay property taxes. While it is true they do not pay them directly, renters are definitely covering the landlord’s property taxes!
Assuming there is a demand, landlords will raise rents, regardless of taxes. They try to squeeze out maximum profit. This is supply and demand and will happen REGARDLESS of taxes.
Another flaw in this argument is assuming that landlords are somehow entitled to no less profit than they are currently receiving. Supply and demand drives the rental market - nothing else. This is a fact, and economists of all stripes have backed this up.
One argument sales tax proponents often make is that “outsiders” will help pay the tax. People who live outside of Johnson County will 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, 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.
Republicans in the Iowa Legislature made the sales tax even worse a couple years ago, and pretty much impossible for me to support. At that time they required that at least 50% of any sales tax goes toward property tax relief. GOP Legislators pretty much could not have been more intentional in screwing the poor.
There are several theological arguments against increasing the sales 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.
“The last shall be first and the first shall be last”; “Do unto others”; and “A rich man has a better chance of putting a camel through the eye of a needle than getting into Heaven.” Each of these argues against putting a greater tax burden on the poor. Let’s follow this lead rather than doing more to comfort the comfortable.
Frankly, I am REALLY tired of wealthy people saying that sales taxes “aren’t that regressive.” Easy for you to say as you vote to cut your own taxes at the expense of our poorest residents! And repeating your false claim over and over does not make it true. This argument is shameful, really.
Let’s be clear. The people who are bringing this up are not bad. They just want to see good things happen. I simply think they are falling into an all-too-common trap. An extra 5, 10, or 20 dollars does not sound like much to proponents. Because it is NOT much to proponents.
We are just all SO scared to ask the people with the most resources to pay for things. If that fear continues to be greater than the desire to do these projects, then the projects should not get done. Because our leaders lack the political will to do so.
The community has needs. I think we should discuss addressing those needs. But let’s not do it on the backs of the poor!
*DID YOU KNOW? The four states with the highest average combined state and local sales tax rates are Tennessee (9.47 percent), Louisiana (9.45 percent), Arkansas (9.43 percent), and Alabama (9.14 percent). Good company, right?
Anyone interested in learning more about County government should take a look at the County website-
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---Rod
posted by Rod Sullivan @ 2:56 PM
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