There are two propositions on the ballot in the October elections. Proposition 1 is a bond issue tied to future sales tax revenue. Proposition 2 solicits voter approval for a 1 percent sales tax.
In recent legislative sessions, when there was talk of a state sales tax, Republicans balked because, well, it’s a tax. Democrats balked because they say it’s “regressive and should be left to local governments”. (As if a sales tax at the local level is somehow not regressive.)
Not only is Juneau’s sales tax regressive, it taxes the poor for virtually all of their purchases — including necessities like food — yet exempts the value over $7,500 for big ticket items, and exempts tourism services purchased on the ship. I’ve twice asked the city manager’s office to include a pro and con section to the sales tax propositions voter information booklets in recent years, as they do with referendum items, but they flatly refused. So be it. You’ll notice that nowhere in the descriptions of the propositions for the sales tax does it mention the fact that all groceries are taxed, but the value over $7,500 for a high value item and tours purchased on the cruise ship, are not.
When the tax on groceries has been brought up before, Assembly members ask “How will we make up for the shortfall?” What shortfall, I ask? How do you have a shortfall when the tax is not raised yet? It may be a shortfall to planned expenditures, but there’s no “shortfall” for projects that haven’t been approved yet. The projects would simply have to wait.
Why do we exempt the value of items above $7,500 dollars? I was trying to think of necessities that cost over $7,500 a pop. A new vehicle? Maybe. A new home heating system or new roof. Certainly. A diamond? NO.
There are many options if we drop the sales tax on groceries. We could simply lower our sales tax revenue and prioritize “needs” and “wants.” We could increase taxes on non-necessity items. The vast majority of states with a sales tax either exempt food altogether, or have a lower tax rate on food, according to the Federation of Tax Administrators. Other states have figured it out. So can we.
Think about both the propositions before you blindly vote yes this October. According to Forbes and NPR’s Planet Money, the poor spend twice the percentage of their income on groceries as do the well-off. I think it’s fair to say that there is less “discretionary” spending for the poor in Juneau than in the Lower 48 where the data above is primarily derived. A gallon of milk costs a lot more here than it does in Iowa.
Voting yes on the propositions is demanding we continue to tax the poor, who may already not be getting enough to eat, on their groceries, while at the same time we exempt purchases of clearly non-necessity, luxury items. Voting NO will send the Assembly a clear message that voters want a tax that is compassionate and fairly implemented.
This is not to say we have to do away with the exemptions; simply that it seems unfair to tax the poor for groceries and not tax the well-off for non-necessity items. The current exemptions can stay in place if necessary. We can still drop the regressive sales tax on groceries and develop a rational plan with what’s left over. We can wait a little longer for the perhaps worthy but clearly non-necessity projects that the propositions propose to pay for. But the only way this change will come is if we vote down the propositions. The Assembly will not do it. This is one of the few times that voters have a direct say in how much we’re taxed and how it’s implemented.
You might be well-off today, and tomorrow be out of a job, or get cancer, or have an accident, and not be so well off. It seems I see it more and more everyday. Looking out for our neighbors begins at home and at the ballot box. Please vote.
• Stopha is a North Douglas resident.
Comments (38)
Add comment100% agree
Very well-written article by Mr. Stopha.
I will be voting against both measures, even though I think some of the proposals have merit. Juneau's sales tax is unfairly applied and needs to be reviewed by the Assembly. Start taxing tours and diamonds and stop taxing food and I'll reconsider my vote.
One point though: Mountain Dew is not 'food'. Neither are Cheetos or Ding Dongs or licorice ropes. Those all should be taxed (better yet, double-taxed).
No tax on food
I agree, that one has always been an issue for me. No tax for seniors but we tax food.
As for the determination of what is "food", I understand where you are coming from. But the logistics of such a subjective application would cost more than we would collect. And you know any cost burdens will be passed on to us, the consumer. Honestly I think all refined suguar should be taxed at the refinery, including corn and agave. I would even tax the chemical subsitutes.
Again applying the tax cap subjectively would also cause more burden than it would fix. It is much easier to apply and defend a tax code that is clear and not subject to interpretation. If we get too heavy handed with it more and more people will buy from the outside to avoid the tax all together. Better to get $375 than nothing.
lat
lost me when you went to (sin?) double taxed ding dongs & the like, why wreck your good points with save the world social engineering?
Thank you
Thank you, Mark, for stating so well the reason to vote against these ballot propositions. I have been the beneficiary for over 10 years of the senior sales tax exemption so a vote for these sales tax measures would have no adverse effects on me. However, I have never thought it was fair to tax food and would gladly give up my tax exemption on discretionary purchases in exchange for everyone to be exempt from sales tax on food. I will be voting against these propositions because, as you so well stated, it's the only way we can begin the discussion. Candidates for mayor and assembly: please take note.
Another possible way to make up lost revenue from taxing food would be to increase the sales tax during our high tourist season (June, July and August). That way tourists could pay more and locals could postpone discretionary purchases to the off-season. Lest anyone accuse me of being unfriendly to tourists, keep in mind that the sales tax in Washington state is 8% so we are a bargain by comparison.
isdand
Not social engineering. Public investment. These 'foods' are a significant cause of increased healthcare costs due to obesity and diabetes and cancer. We all end up paying for those costs in many ways - insurance, medicare, lower national productivity...the list goes on.
Why subsidize the consumption of addictive poison by removing taxes on it? Might as well eliminate taxes on alcohol and tobacco as well, since those are consumed products. What's the difference?
Eliminate the sales tax on food staples. Not desserts and 'snack' foods. The line isn't that hard to draw. We all know about where it is.
@Lat
So what you are saying is that in order for public health care to work, one also needs to have a government-mandated diet?
BTW: if you do not subsidize health care at all, then, you do not have to worry about "regulating” what people eat or other choices they might make that could have negative health effects.
agreed
the list goes on, red meat, many OTC drugs, all sorts of inhalants. When &where does it end? When is the individual a responsible participant in their own longevity.
We have abortion on demand for those unborn which is fine & dandy, yet once Julia can crawl the government is going to make sure she's taken care of till she ends up crawling and pooping all over herself again. & because of all those unwanted that never had a chance to learn how to crawl the revenues to care for the old keeps diminishing. I'm not trying to be argumentative, that's just the way I see it.
Indeed, AH HA, letting people
Indeed, AH HA, letting people die and suffer when we don't have to is the humane thing to do. It's what makes society thrive!
If you think a tax on certain items equates to a "government-mandated diet," then you must think the government is forcing you to be sober, since it taxes alcohol. And you'd think wrong.
Not taxing something is not a
Not taxing something is not a subsidy. That point aside, I agree that both propositions should be voted down in favor of an actual discussion of what's needed and can be afforded by those that pay the taxes. I also agree that there should be no sales taxes on food. This places an undue burden on those lease able to pay. I'd push that up to heating oil as well. As for sin taxes on sugar and the like, I will just warn that sooner or later the tax man will come for something that you like, too. The continuing effort of people telling me what I can and cannot eat is getting very tired. Don't like it, don't eat it, but leave my dinner alone.
akjim
Well said
taxing cigarettes
taxing statistically unhealthy habits is all-American. Jim, when you say "sooner or later the tax man will come for something that you like, too" I think you should be reminded that the tax man already taxes cigarettes, alcohol, tanning salons, etc. It's an incentive to use less of an unhealthy substance while still being affordable. It's just like tickets for no seatbelts.
The government needs money. Sticking it to the minority works, i.e. cigarette smokers, heavy alcohol users, tanners, etc.
Now, when the talk comes around to items that a majority of Americans like, i.e. McDonalds, the discussion takes a dark turn where the inevitable outcome is overtaxation. Where is this discussion on the rest of these sin taxes? No one is standing up for cigarette smokers, although as you suggest:
"sooner or later the tax man will come for something that you like, too."
Cheeesy, perhaps the first
Cheeesy, perhaps the first time I've ever agreed with anything you've said. As a non-smoker and non-drinker I've never said much about the ever increasing taxes, though the tan tax is seemingly getting out of hand. But sooner or later, they were bound to come for my sins, too.
The city tax man, in this case, can only enter your home
when invited. But your neighbor? Hey, go ahead.
Taxing unhealthy habits is not all-American.
It is politically expedient, and lucrative.
Double tax on bacon and eggs!
Cholesteral, fat... High blood pressure, hardened arteries...
Dump the 1% temporary sales tax...
...and the $25million bond issue. They both are loaded with pork that will deepen shortfall.
How about eliminating the sales tax exemption for lobbyists
We tax food in Juneau but under the CBJ tax code, lobbying services are exempt. That is just plain bad public policy. If the lobbyists paid tax on their fat checks from special interests like oil and gas companies, the amount gained would offset a big chunk (if not all) of the revenue that would be lost by exempting food from the tax.
I have already voted no on both propositions.
food tax
The point about eliminating the food tax is so poor people aren't penalized on getting their nutritional sustenance. Dr. Pepper and Red Bull do not meet that basic human need. Nor do Snickers bars.
Not sure what does? Let a few nutritionists and dieticians define it.
And yes, if you eliminate a tax on something, you are in effect 'subsidizing' it. Right now we subsidize diamond purchases.
Amazing that elected folk won't address taxation of food
I read about how everyone is against taxing food, but our Assembly never bring the subject up during the budget. It is time to do something about taxing food and basic necessities in Juneau.
Excellent My Turn
Very well reasoned arguments for voting no. I'd support exempting from the sales tax: groceries, heating oil, electricity and water/sewer (anything essential). I'd support raising the sales tax on all other items and during the summer months when we have more visitors. I'd support legalizing marijuana and taxing it the same as alcohol and cigerettes. I'd support taxing all processed foods at whatever end makes sense. I'd support a single-payer health care system for all preventative procedures and life-saving procedures, and private insurance for all the rest.
The idea that we want to go back to a society that allows the young, elderly, infirm and those with disabilities to rot while those with money can access good health care is not a society for me. You can use all the fear-mongering, fundamentalist ideological rhetoric you want, but in the end you must be honest about what it means to real, live persons - your neighbors, friends, family maybe even you. In fact, if you truly support such a society, I think you personally should have to look in the eye and kill every other member of society who is sick and dying but can't afford the medical procedure necessary to save them. Starving children? Look 'em in the eye, tell 'em they are victims and shouldn't feel entitled to anything (let alone food, shelter and safety) and then cap 'em. If you can do that, you're truly living your stated values. Otherwise, you want the nanny state to do it for you so you don't have to take any responsibility for your policy positions. Kinda like free market supporters ...
Now back to your regular programming (I think it's time for The Kardashians or Bristol Palin's next reality show).
@llahsram
so are you saying that a lobbyist who takes clients out to dinner in Juneau doesn't have to pay sales tax on that dinner? wow.
The lobbyist will pay tax on the dinner but...
The company that pays the lobbyist does not have to collect sales tax on the fees paid to the lobbyist. If you hire someone in Juneau to work on your car, you are charged sales tax by the mechanic. The mechanic then has to pay the tax to CBJ. A lobbyist who is paid to work on an issue for an oil or gas company (or other interest) does not have to pay sales tax on those services and no sales tax is paid to CBJ. If a tax preparer does your tax return, you are charged sales tax on that service and the tax firm has to send it to CBJ - not so for a lobbyist.
I agree that it's time for the Assembly to review all of the sales tax exemptions in the tax code and decide which make sense and which don't. They also need to make the same determination about what is taxed and whether it's good public policy to tax it (like food). A few years ago, some Assembly members singled out the Senior exemption for elimination. That makes no sense if it's done without putting all of the exemptions on the table and taking a comprehensive approach.
Tax overhaul
Just a correction to bjfleuetsch's frustration. For the last three years someone HAS asked for a broader look at taxes every year during the budget cycle. Before me Sara Chambers was a strong advocate for no sales tax on food. Randy Wanamaker almost had his head handed to him for taking the lead on a discussion of tax reform in 2005. The problem is that one voice cannot affect change.
The assembly thinks it is their job to represent the interests of the public. Most want to serve the majority, sometimes even overriding their own first preference. But they need to know what the majority wants.
Think about the Fisherman's Memorial for a minute. The assembly voted to go forward with the new Cruise ship dock 16b on the condition that provisions be made for safety at the private docks during high wind events and for moving the Fisherman's memorial if that was the desired outcome. At first, the interested parties could not agree whether to move the memorial or to fight to retain their current access to the channel. The absence of a clear voice from the public on this or any issue sends the message that the time for change has not yet arrived.
The current assembly appears unanimously willing to consider a speed limit change in Auke Bay because over 1,000 individuals signed a petition of concern. That is a message the assembly can't dismiss.
Well Ruth...
...I intend to send a message that won't be missed, by voting 'no' on both measures. And usually I would vote yes for measures like these.
The sales tax needs to be reconfigured significantly. No tax on food (real food), and strongly consider a higher summer tax and a lower winter tax. Also, challenge the sales of Juneau tours onboard cruise ships as tax-free.
Ballot measures need to be proposed individually. Lumping critical needs like the adolescent mental health center with the off-road vehicle park is simply BS. Let each one of those measures stand (or fall) on its own merits.
Compromise - anything allowed
Compromise - anything allowed to be purchased with food stamps won't be taxed.
I prefer Michael Pollan's definitions
Don't eat anything your great grandmother wouldn't recognize as food. "When you pick up that box of portable yogurt tubes, or eat something with 15 ingredients you can't pronounce, ask yourself, "What are those things doing there?"
Don’t eat anything with more than five ingredients, or ingredients you can't pronounce.
Stay out of the middle of the supermarket; shop on the perimeter of the store. Real food tends to be on the outer edge of the store near the loading docks, where it can be replaced with fresh foods when it goes bad.
Don't eat anything that won't eventually rot. "There are exceptions -- honey -- but as a rule, things like Twinkies that never go bad aren't food,"
Don't buy food where you buy your gasoline. In the U.S., 20% of food is eaten in the car.
partial solution
While it gets very political as to what or is not needed food there is one easy way that could be applied to what is exempt from sales tax on food. Simply use the same items that are allowable for purchases with food stamps. Every merchant that operates a grocery sales knows what food stamps can purchase. This is far from the perfect solution but it would be easily implemented at existing stores with minimal enforcement problems. As I see it sales tax on food items paid for with food stamps is a real redundant practice.
Ruth, Ruth, Ruth
Stop blaming your ineffectiveness to find support for your positions on some ethereal mystic notion.
The problem isn't that one voice can't effect change it's that your voice didn't find support. You had every ability to offer an amendment to the sales tax to exempt food! Did you? You make a motion count the votes and move on. It's called representative democracy.
Your paragraph on the memorial makes no sense and there lies your problem. What in the world is your point? The absence of a clear voice...? Do you expect every citizen to pile into the small city building and testify on every issue? You would never get anything done. You were elected to use your judgment. Use it and if the other members disagree so be it. Move on to the next issue.
Thank you Mark. We need
Thank you Mark.
We need change. I will be voting NO.
Concerned? put a shoe in it will ya.
Jumpstart?
I don't understand your suggestion?
Oh and what change do "we" need? What would you like to see changed?
thanks llahsram
that was an excellent explanation. also an interesting argument because a mechanic is providing a service, so pays sales tax; however, an employee is trading their labor for a wage (sorta the same as a mechanic), and doesn't pay sales tax. it sounds like you're arguing the lobbyist is offering a service rather than exchanging labor for a wage (under contract). i think that's a reasoned position that deserves some attention. thanks again.