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AdvancedKnee Jerk Reaction: Sales Tax Bad
Full disclosure: I have not done my homework. In the interest of convincing both remaining loyal readers of this blog that I am serious about updating regularly, I am getting this out quickly rather than spend a lot of time on research.
This Feb. 5th, registered St. Louisans will not only have the opportunity to support the aspirations of Barack Obama or another candidate for the Democratic or Republican nomination, they will also get to vote on whether or not to hike the city sales tax another 1/2 cent, in the interest of, among other things, \\\"...funding police and fire pensions...\\\".
First of all, I should make it clear: Sales Taxes Are Bad. They are the worst, most regressive form of taxation. They impact the poorest people the hardest, and the wealthiest people the least. There are some who say sales taxes are the fairest, because everyone pays the same rate. In response to this, I am reminded of the words of Anatole France:
The law, in its majestic equality, forbids rich and poor alike to sleep under bridges, to beg in the streets, and to steal their bread.
Enough said. There is more to this story, though.
In general it seems like people would be in favor of \\\"funding police and fire pensions\\\". Could that language be more loaded? Who would vote for not funding those things? Not many people. Interestingly, there is little language in the proposal to insure that these funds are actually used for this purpose.
I think the op/ed piece made some strong points. It is worth checking out if you are still undecided.
I am pretty much always going to come out against sales taxes. I will take a much harder line on some than on others, depending on their purpose. Especially since, as the article points out, this tax hike is being passed in a city in which less that half of the properties actually generate any property taxes (tax abatement fever), it seems quite perverse to ask the people of St. Louis to shoulder even more of the tax burden.
Vote no on prop S.
anon I hope you are pointing these things out in a location that gets more views than here (no offense adam). For the record I bought a $5.50 sandwich today that totaled $6 with taxes. 9%, on top of high RE taxes and 1% earnings tax. The sales taxes in the city are already very high, and i can not say they are being spent wisely (even effectively) and if what anon says is true then my suspicions that they need this increase because one way or another they mismanaged the fund are true. Enough is enough
Submitted by: Anonymous (not verified)
Take a good look at the police and firefighters\\\\\\\' pension. They are fully funded by Missouri standards and were fully funded before the court ordered the city to make additional payments. Why did the judge order the city to make the payments? Because it was in state statute.
Think of it this way.... John Doe wants to have $100,000 when he\\\\\\\'s 65. His financial advisor tells him to put $100 away every month to reach his goal. At age 64 John Doe hits tough times and needs that $100 a month. John Doe realizes that his years of investing $100 a month are now worth $150,000. Due to good investing he has surpassed his original goal so he stops making the payment.
The city did the same thing but because their payments are mandated in good times and in bad they were forced to make the payments they skipped (plus interest) into a fund that was already in good shape. This funding formula is archaic and no public entity in MO uses the same formula as our Police and Fire departments. It won\\\\\\\'t change though because the vast majority of MO legislators aren\\\\\\\'t from St. Louis and don\\\\\\\'t want to vote against firefighters and policeman.
Police and firefighters are in the cat bird\\\\\\\'s seat. Their pensions get/got this additional money whether the tax passes or fails. With even more funding in the pension system they can ask for more benefits. It would be wonderful if they were willing to sit down and negotiate with the state officials on how to set up a funding formula that would not require the city to raise taxes but when your in the cat bird\\\\\\\'s seat it\\\\\\\'s easy to get selfish.
It\\\\\\\'s a tough call. A 1/2 cent sales tax is huge and the vast majority will go to a fund that doesn\\\\\\\'t technically need it. If the tax doesn\\\\\\\'t pass the City could face a downgrade in it\\\\\\\'s bond rating. This could have a big impact on future developments. If you’re not happy with past city developments this could send a wake up call. A wake up call that could stop bad future developments but also stop good future developments.
Pick your poison.
A loyal reader