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.