On November 2, voters of Richland County will decide whether to raise the prices of goods and services by some $62 million or more per year. That’s the estimated impact of a new 1¢ local sales tax. Voters several times in the past have resisted the temptation to raise the sales tax, but this time the promoters have offered an irresistible bribe. They say they’ll use all of the money collected to help offset property taxes.  

Property owners have been howling regularly about taxes and it’s reasonable to think they’d vote for any scheme that would shift some of their burden to others, especially non–property owners. And that’s precisely what the Local Option Sales Tax (LOST) promises to do, add a cent to every dollar of taxable goods and services sold in the county and apply all of it against property taxes. 

There’s the unsettling question of taxing low income people so as to lower taxes on the rich, but that is the unavoidable consequence of this tax proposal. Tax proponents defend it this way:

“Some Protections – Certain items are exempt from the sales tax: rent, gas, residential electric bills, water bills, food purchased with food stamps, and prescription medicine. The facts are that people on fixed income or the poor do not spend as much money as wealthier individuals and families.

Less fortunate individuals would pay the least amount of additional sales tax and still receive significant credit for homes and cars.”

A renter who doesn’t quite qualify for food stamps and drives an elderly car isn’t going to see much in the way of a break. One supporter of the new tax told me the tax rollbacks landlords get will eventually lead to lower rents. I doubt he had ingested anything that strangely influenced his reason. It’s his genuine faith in the generosity of landlords. The fact is the renter will be smacked as hard as rich people for a loaf of bread and a six–pack of beer and will be a net loser at the end of the year.  

An editorial in The Other Paper on June 26, 2004, said it precisely. “There is one glaring negative that must be considered. A higher sales tax would be unfair to poor people because they spend a greater percentage of their income on taxable items.”

A sales tax is regressive, but with only three weeks to the referendum on this question there has been very little discussion about it. The people with the lowest incomes need to be made aware the proposed local sales tax is a “trickle–up tax” from their pockets into the pockets of the well–to–do.

The rich have always been accused of soaking the poor. I’ve never thought it was actually true, but if the sales tax passes in Richland County on November 2, I’ll have good reason to change my mind.

Wrisley.com