Why Are We So Afraid Of Taxes?

In this world nothing can be said to be certain, except death and taxes.
– Ben Franklin

 

What level of taxation is too high? That seems to be the question of the day.

For a very small but vocal minority, all taxes are theft and should be abolished. The result of this policy, of course, would be a country with no military, no legal system, no health care, no roads, and virtually none of the things even the most primitive civilizations take for granted. I see no point in engaging that argument.

For the rest of us, there is no particular reason that 6 percent is the level that makes the most sense. Sometimes we will need more public funding. Sometimes we won’t. But one thing we constantly hear today from our electeds is that “we need X, the voters want X, but we don’t have the money for X.” That’s a pretty clear sign that taxes are too low.

We desperately need to fund low-income housing and transportation, for example, and that’s just for starters.  When we spend money on these things, we are advancing the interests of the vast majority of residents. To do that, we need to raise money through taxes. There is no other way.

Those who are ideologically opposed to taxes love to point to underperforming government projects and claim that government can’t do anything right. This is nonsense. Our government sent humans to the moon and back more than 40 years ago. Demanding perfection in any human endeavor – public or private – is a fool’s errand, yet many insist on perfection for public investment.

What’s more, many of those imperfections are not a result of government failure, but of our failure to provide government with the funding it needs to do the job right. The Grove is a great example; hamstrung by a lack of funding, the Housing Authority was forced to prioritize cost savings over best design and now faces criticism from many of the same people who opposed funding housing properly in the first place. It’s like refusing to put oil in your engine, and then complaining when it seizes up.

We, through our local government, should be building a general fund for public investment. Opportunities will present themselves for great public investment, and it’s shortsighted to not be fiscally prepared to take advantage of them. I regularly hear the argument that we need to know specifically what taxes will be spent on before the money is collected. This makes no sense to me. I don’t know how I am going to spend every penny of my income before I go out and earn it; I know that I will need it one day, and I trust myself to know when that day will come.

So how much is too much? Teton County residents currently pay 6 percent sales tax, which comprises a state portion of 4 percent (69 percent of this goes to the state treasury, while 31 percent is returned to local governments based on population). Another 1 percent is allocated to the local general funds, and 1 percent to the Specific Purpose Excise Tax. We pay no income tax.

Compare this to Aspen, Colo., where residents pay 9.3 percent sales tax, or Crested Butte at 8.5 percent; Vail and Telluride residents dole out 8.4 percent. And all Coloradan’s pay 4.63 percent state income tax on top of that.

Six percent is far too low. We have the ability to raise the sales tax rate from 6 to 7 percent, and I think we should seriously consider doing that. We can assess a city property tax (while exempting the lower end of price range) and ask those who own property with greater impacts to pay their fair share. We can have great roads here, well-designed low-cost affordable housing, a comprehensive transportation system, a well-funded social services sector, and so much more. These are the kinds of things the community needs to fund publicly; they will not exist if we wait around for the private sector to provide them.

For long-term residents, increased sales taxes are a screaming deal. More than anywhere else in the state, tourists and short-term visitors support the retail sector, and they can and should help fund much of the infrastructure that they burden. We’ve seen how disruptive these impacts can be, and if we want to maintain our community character, we’re going to have to start spending money to mitigate them.

A 1 percent increase in sales tax isn’t going to break anyone’s budget, especially when you consider the public gain in services and infrastructure. Someone spending $100 at Kmart will pay an extra $1, while someone spending $25,000 on an imported rug will be contributing an extra $500. Yes, that $1 will add up, but it will be offset by an increase in affordable housing, lower transportation costs, and a generally higher level of community investment in things everyone needs. And no one is going to cancel their trip to Jackson because of a 1 percent increase in sales tax.

There is nothing magical about 6 percent. I’m constantly told that no one will go for raising taxes, but I don’t believe that’s true. Imagine a future where workers have housing; where public transportation can get us quickly, reliably and cheaply to anywhere we need to go; where the most vulnerable members of our community have reliable and consistent access to important social services. A future where we aren’t left to the mercy of the state as we pray they don’t cut our funding. I’ll happily pay more taxes for a future that looks like that.

Wyomingites take great pride in self-reliance, as they should. Properly funding our local government through appropriate levels of self-taxation is one of the most important ways our community can remain self-reliant. Let’s stop being afraid of taxes, and instead appreciate what a well-funded and well-run local government can do.

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