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Taxed a Little More

I voted for a tax today. It was a 1% sales-tax increase recommended by the city government and earmarked for flood recovery, matching federal government funds for things like improving infrastructure by the river and relocating one of the city’s wastewater treatment plants.

But it wasn’t an easy decision. When I asked myself whether I would be happier to see the measure pass or fail, I was ambivalent. I am uneasy about sales taxes. Sure, the tax’s advocates said that, as much as it was a tax on us, it was also a tax on out-of-towners who come in to shop, that passing it would get them to help pay for our flood recovery. Similarly, current and former city council members told us we were going to pay for the infrastructure improvements one way or another—better this than utility rate hikes.

But sales taxes are among the most regressive. Everyone must pay them at the same rate, regardless of their ability. And besides, if the choice truly was between a sales tax and a utility rate hike, there is public assistance for the poor to pay their utilities. No such public assistance exists to help the poor pay sales taxes.

Ultimately, I voted for the tax for two reasons. First, last year’s flooding made it apparent flood mitigation really is needed here. Of course, the best way to limit the effects of flooding in the future is to convert as much as the Iowa River’s flood plain to wetlands as possible. But even if that were possible sooner than later, infrastructure improvements to roads along the river will also be necessary. Second, the way the tax was structured, it was in my best interest to vote for it. Every community in the county had to vote for it independently, and the tax would be levied only in the towns and cities where it passed. Its revenue, however, would be apportioned by population, and Iowa City has the greatest population in the county. By virtue of the fact we would benefit most, the tax was much more valuable to us than it was, say, to North Liberty or Swisher.

And I think it is the competitive calculations brought on by the second reason that made me most ambivalent about the vote. The fact the tax was limited to flood recovery was its strength and its weakness: on the one hand, it addressed a very real need in our community; on the other, it tied the hands of the smaller communities in the area.

Anyhoo, the tax passed by six votes. At the same time, it failed in Coralville, where many of the area’s hotels and its biggest mall are, thus scuttling most of the high rhetoric of those who said out-of-towners would help pay for our new public works. Oh well.

 

Comments

I had no qualms—though perhaps I should have—about voting for the 1% temporary sales tax here a couple of years ago. The money is going to the new Cody library, a new pool in Powell, and a major revamping of our pool here. Of course, Wyoming has no state income tax and no sales tax on food, and the sales tax is only 4% to begin with. I dimly remember when sales tax in Iowa was 4%, but it’s been a long time since I lived anywhere with a rate that low, and I did not notice the increase here at all. Others’ mileage may vary.

We’re up to 7% now, which is the highest sales tax I’ve ever lived with. Since I hardly shop for anything, I probably won’t notice it either.

Well, that’s if the local option sales tax actually does pass after they count all of the absentee ballots. What a squeaker.

I remember being amazed at having a 5% sales tax when I moved to Iowa. When I lived in New York, it was 8 or 9%. Now it’s 8% there, apparently.

At least there are end dates on this LOST and the one we passed for the schools. I guess if we can mitigate the effects of the next 500 year flood, it’ll be worth it.

It strikes me as odd that our local anti-tax wackos, I mean Republicans, don’t include the regressive nature of sales taxes in their platform. It’s just “We’re Taxed Enough Already!” Even if they don’t really care how the additional 1% might impact poor people in the area, it would add some conscience to an otherwise purely selfish approach to the question.