Chat with Dennis "Boog" Highberger / LJWorld.com

October 24, 2007

This chat has already taken place. Read the transcript below.

Lawrence City Commissioner Boog Highberger will visit the Newscenter at 1:30 Wednesday to discuss his proposed 'intangibles' tax.

Moderator:

Hello. This is your moderator, Cody Howard. Our thanks to Lawrence City Commissioner Boog Highberger for joining us for today's chat.

Dennis "Boog" Highberger:

Thanks, Cody. I look forward to an interesting discussion.

Moderator:

For starters, please give us a brief description of the intangibles tax.

Dennis "Boog" Highberger:

An intangibles tax is a tax on EARNINGS from certain kinds of intangible property-- property like bank accounts and stock dividends. State law allows cities, counties, and townships to assess a tax of from 1/8% to 2.25% of such income. Some kinds of interest are exempted, including individual retirement and Keough accounts, and there is an exemption for low-income seniors and people with disabilities.

The reason I have asked city staff to investigate the intangibles tax is because our current local tax structure places an unfairly high burden on low and middle income households. all of our current sources of local revenue-- sales taxes, property taxes, and fees, are regressive-- meaning that lower income people pay a higher percentage of their income than wealthier people. If your household income is $24,000 or less, you are likely paying more than 2% of your income in city sales and property taxes-- if your income is $200,000 or more, you are likely paying less than 1%. I am not completely convinced that the intangibles tax is the best approach, but I think we need to do something to make our local taxes more fair.

LogicMan:

Boog:

Individually, we all must live within our means. Why is it so difficult for politicians to do the same with our collective funds (or lack there of)? Is it that hard to say "no"? Thanks.

Dennis "Boog" Highberger:

LogicMan-- Our job as elected officials is to try to provide good services at a reasonable cost. The high quality of life we enjoy here depends on providing high quality services, but we need to provide them as cost effectively as possible. Our expenditures for 2007 will very likely be lower than for 2006, at tge same time that many of our costs are rising. Even if we don't raise any new revenue, I think we need to find a way to make our local taxes more fair.

situveux1:

Why should I continue to live in Lawrence rather than say, Eudora, if the city will soon be punishing me for saving money?

Do you think this idea will have a significant effect in the next election cycle, given the inability of the city to maintain basic city services like streets and yet its apparent infatuation with redistributing money between classes?

Dennis "Boog" Highberger:

situ-- I think our current tax system redistributes money among classes, and that's why we should find a way of making it more fair. A 1% intangibles tax would have very little effect on most taxpayers. Anybody with taxable income of less than $500 or year would pay nothing, because tax amounts less than $5 are not assessed. A household with $1000 per year in taxable income would pay $10, and a household with $10,000 in taxable income would pay $100 per year. In contrast, a family with an annual income of $60,000 would pay slightly over $100 more a year with a 0.5% sales increase, while a household with an income of $36,000 could expect to pay $55 more per year, and a family with $200,000 income could expect to pay $180 per year. I would like more information about how an intangibles tax would affect different individuals in Lawrence before moving forward, but I still think it is a revenue source we need to consider before raising any other taxes.

hawkperchedatriverfront:

Mr. Highberger, how would this "intangible tax" collection be enforced. What if a person has all of their investments in the state of Wyoming? Also, have you visited with the financial investors in this town to see how this would affect their clients?

Dennis "Boog" Highberger:

hawk-- Good questions. An intangibles tax return would be filed at the same time as the Kansas state income tax return. If you look in your annual Kansas income tax booklet, you will find an intangibles tax return and a listing of all the cities, counties, and townships that impose an intangibles tax. It is my understanding is that the "tax situs" of the taxpayer is what determines where the intangibles tax is paid, meaning that if you lived in Lawrence you would pay the tax on interest you earned regardless of the location of the investment. I think your suggestion of consulting with financial advisers before taking action is a good idea. As I said before, I need more information about the how the intangibles tax would affect individual taxpayers before I would make a formal proposal.

justthefacts:

You said "Our job as elected officials is to try to provide good services at a reasonable cost." Since when? Isn't the job of government to provide those services that individuals cannot provide, like roads, police, and other necessities? Aren't all other services extras that we have gotten used to over time? Since when are things like sculptures down town (which the KU arts students would probably loan to the city for free) a necessity??

Dennis "Boog" Highberger:

Justthefacts-- Roads, fire, and police are good examples of city services that most people consider "necessities." I think there is less of a consensus about the necessity of other city government functions, such as the downtown sculpture program you mentioned. There is very solid evidence, however, that arts spending by city governments generates a substantial net economic benefit. A lot of the things that aren't strictly necessary make the difference between having a great place to live and just a tolerable place to live, and that has an enormous impact on economic development. If you look around the world or around the country, you will find that low taxes don't necessarily lead to strong economies, because it is the places that are willing to invest in high quality infrastructure and high quality of life that have strong economies. Each city government must decide which services are worth funding, and that's why we have elections.

Raider:

Boog, instead of increasing the sales tax, or implementing this "Robin Hood" tax, why doesn't the commission do something to attract a better quality of retailer to the city? If shoppers are leaving to make their purchases in Overland Park or Topeka, why wouldn't the commission want to attract places that will keep our business in town. That should increase sales tax revenue without increasing the tax rate. Right?

Dennis "Boog" Highberger:

Raider-- You're absolutely right-- increased retail sales would be preferable to an increase in any of our tax rates, and having different new retail options would be much more likely to increase our retail pull factor than adding more of what we already have. Retail recruitment has traditionally been done by the private sector rather than by local government, which has focused on manufacturing and other nonretail employers. Part of the reason for that, I think, is that local retailers are potentially competing with each other, and it doesn't seem appropriate to use public money to create competition for existing local businesses. It may be time to look at city participation in attracting new types of retail that would not be in direct competition with existing local businesses.

Moderator:

That concludes today's chat. Our thanks to Lawrence City Commissioner Boog Highberger for joining us today.

Moderator:

That concludes today's chat. Our thanks to Lawrence City Commissioner Boog Highberger for joining us.

Dennis "Boog" Highberger:

Thanks, Cody. I appreciated the thoughtful questions and I look forward to continuing this discussion.

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Raider 5 years, 6 months ago

Pretty much, if you recruit any type of decent clothing store there will be no competition with local retailers. There are absolutely no places in town for men to buy decent clothes.

clyde_never_barks 5 years, 6 months ago

yeah, bring back Easton's...come on Greg.

clyde_never_barks 5 years, 6 months ago

Marion...why didn't you ask your questions during the "chat?"

oldgoof 5 years, 6 months ago

Hey Marion. How much sales tax collections does your internet firearms & parts web site generate annually? If I buy something from you with a Lawrence Kansas address, do you charge and remit sales tax? If I buy something from you with a Colorado address, do you charge and remit sales tax? .. I am not making accusations, but I am just curious.

Confrontation 5 years, 6 months ago

I agree that paying for sculptures downtown is a complete waste of money. There are many art students/starving artists who would loan their items. I also think it's a waste of tax money to keep funding agencies like the Humane Society.

clyde_never_barks 5 years, 6 months ago

Woof!

justthefacts 5 years, 6 months ago

Someone needs to (a) Give Boog a copy of "Atlas Shrugged" and make him read it and (b) pay for him to take an economics class taught by someone who is well versed in how ALL taxation ends up hitting the poor and middle class harder then those who have more money/valuables. The rich always find a way to either escape it (by paying CPA's and law makers to find or make loopholes) or pass it along to others (e.g. landlords raise rents, service/property sellers raise rates, etc.). Anyone who thinks raising more revenue to spend is going to fix what ails the government has not read enough history and is being very short sighted. The government cannot make people a success or enforce mandatory charity, no matter how well intentioned. Attempts to do so have always back-fired and it always will. The best thing the government can do is collectively provide absolutely necessary services (the ones to protect health and safety) that cannot be afforded any other way (fire, police, etc.) and then get out of the way and let the private citizens do whatever they want, without government interference or subsidies.

If Boog and the downtown merchants think sculptures attract people (who buy things) let them pay for the price for such "art" out of their own pockets. Not mine!

Why is it that so many people who want to fund new ideas with taxes believe in "trickle down" economics ("if we do this, we'll see more economic growth"), except and until it comes to raising a new kind (or amount) of taxes ("The only people who'll feel the pinch are the very rich!")!?

monkeyhawk 5 years, 6 months ago

Here was my question (which did not merit response)...

Why are you pursuing this idea when the informal poll shows a whopping 88% against it? It should also be noted that Mr. Boog will be exempting himself from this tax.

monkeyhawk 5 years, 6 months ago

Also...... Mr. B stated:

"Retail recruitment has traditionally been done by the private sector rather than by local government, which has focused on manufacturing and other nonretail employers. Part of the reason for that, I think, is that local retailers are potentially competing with each other, and it doesn't seem appropriate to use public money to create competition for existing local businesses. It may be time to look at city participation in attracting new types of retail that would not be in direct competition with existing local businesses."

Is he saying that the local government should stay out of the private sector, but in the next breath if they are going to jump in - let's try to be non competitive?? Kind of like Eagle Bend, the Parks & Rec programs, the MT?? Not to mention the sale of that nice little parcel on Clinton Pkwy for pennies.

nekansan 5 years, 6 months ago

I also question the expense from an administrative standpoint in assessing and collecting such a tax. The bottom line is the city needs to prioritize their budgets to maximize the benefit of their investments. The "T" is just one example. I really wonder if we could issue subsidized taxi vouchers for less money than the city currently spends on the bus system and still provide the service for those that need transportation at a reasonable cost? If you look at the numbers for the "T" the city spends $6.64 for each trip made by the public. A city paid taxi is almost a better deal for many of the short trips across town compared to the per trip costs on the "T".

stuckinthemiddle 5 years, 6 months ago

You did a good job, Boog...

nothing surprising, or enlightening about any of the comments being made here...

"Atlas Shrugged"... oh yeah... a must read... ~yawn~

justthefacts 5 years, 6 months ago

Not a must read. Just a decent read for anyone who has an mind open to all kinds of ideas. Whether you agree with them or not.

I read it at age 16 (and not b/c it was an assignment). But if you don't want to read it, or think you know what it says, that sort of proves the point. It merely points out that those who think the "haves" are going to willingly share the wealth if forced to do so (by their government) are not only wrong, but going to be unpleasantly surprised by the results of trying to force charity down the throats of those who have all the power and money. A tax on intangible wealth - like most tax - only forces those who have such income/wealth to (a) leave the jurisidiction; (b) find or create new loopholes and/or (c) pass the cost on down to the have nots.

stuckinthemiddle 5 years, 6 months ago

biggunz you better move out of state and out of the country... the state and feds already tax your savings account...

Baille 5 years, 6 months ago

"Atlas Shrugged?" That's funny. What next? "The Prince?"

stuckinthemiddle 5 years, 6 months ago

justthefacts I read it years ago... not as young as 16 but in college... and it wouldn't surprised if Boog has already read it, as well... I think Rand's philosphy is as good as most others... but it is just a philosphy...

justthefacts 5 years, 6 months ago

I asked a question that was not answered; how is such a tax enforced or enforceable? Does it depend upon individuals to declare their profits? And if so, how can that be check up on? Aren't banks required to protect the confidentiality of clients, by federal and state laws? Would a change in state/federal banking law be necessary in order to require banks to report interest earnings? And how would such a city law/tax be enforced against an out-of-state bank/investment? Can the city of Lawrence require a bank in another state (say New York) to report the earnings of all its Lawrence Kansas residents?!

As far as reading social philosophy goes (like Rand, the Prince, etc.) I think it is good to read and take into the old "mental hopper" as much as possible from all possible sources. Then re-read and re-think from time to time. I have long tended to read up on things - a lot - before forming firm opinions (and thus have few firm opinions). Both the books noted tend to point out the perils of having too much power placed in the hands of people who have too little information (or humanity).

From what I can gather, there seems to be inherent problems in any idea that government can micro-manage people (or their finances) without creating more problems then it fixes. And isn't it amazing how new laws are always aimed at "the other guy." It might really help cut down on a lot of new ideas if lawmakers (such as city "leaders") could only impose new rules that apply to them, and not just to all the others!!

P.S. Boog dear - how about your KPERS pension? It earns interest. Care to give up some of that to pay for downtown sculptures?

bearded_gnome 5 years, 6 months ago

justthe facts, well said, thanks.

as I read the Boog's comments he's proposing this not because lawrence needs a new income stream, but because he wants to target "the rich" who are getting away with something now in his eyes. not a very good motivation=punitive. indeed, any estimate of how much this tax would bring seems to be based on static projections which fail to consider that the "targets" will do something to remove the bullseye from their backs. that always happens. federally, receipts are way way up, due to GWB's tax cuts stimulating the economy. how will an intangeables tax impact the financial institutions and the economy of lawrence? will investment slow in lawrence. seems mr. Boog forgets that savings and investment have a direct connect to economic activity, growth, and yes, jobs.
when people like him put in a "luxury tax" at the federal level which included heavy taxes on yachts, it was thought this would just hit the "rich." what it did do was throw a massive number of people working for yacht manufacturers outa work. duh.

if you think that what what lawrence really needs is a new tax, you really don't understand economics.

if he and the city poobahs want to attract new retail, new business activity, then look at ways to promote that by cutting taxes in a strategic way. and government shouldn't be deciding what kinda business comes in, let the market decide that.

50YearResident 5 years, 6 months ago

Intangibles are taxed on your Kansas State Tax return by county, it has been collected before in Douglas County before. I have paid this tax on previous tax returns. If my memory is correct the intangible tax was dropped in Douglas County because it was too expensive to collect it compared to the amount of money actually collected. There was little or no gain after expenses.

Ragingbear 5 years, 6 months ago

Boog is wrong about what elected officials are supposed to do. Elected officials are not there to see to it that the people get what the government thinks they should have. They are there to represent the will of the people. Somewhere along the line, politicians forgot that was their job. So why not just do a recall on the entire commission? I think almost everyone has had enough.

Sigmund 5 years, 6 months ago

Totally bogus.

I asked four questions, none were answered. In short they were:

What leads you to believe that you need this money more that the people who are saving for college, cars, homes, retirement, etc. They are fiscally responsible and living within their means, why can't the City do the same? Doesn't this tax punish fiscal responsibility and reward deadbeats like the bankrupt former Kommissioner and current head of the KDHE?
Do you see it as your job to take money from those who have saved to provide services for those who have less money?
What part do you believe past Kommssions played in the current fiscal "crisis." Isn't this a problem of your own making by wasting money on studies, legal fees fighting Walmart, expensive empty bus systems, and unneeded roundabouts, to name only a few recent "Boogdoggles?"
Would you support a post audit by the State of Kansas to assess Lawrence's current and past finances. We had plenty of money in the past, where has it all gone?

Apparently The Boogmeister did not have good answers for them or Commander Cody thought they were too confrontational. These chats are bad jokes.

Godot 5 years, 6 months ago

There is so much wrong with this. Apparently Boog does not understand the purpose of city government; he also does not understand the purpose of a tax, and it is abundantly clear that he has no concept of math.

Godot 5 years, 6 months ago

Sigmund, it is time to contact legislators who would be interested in supporting our request for an audit of the City of Lawrence. My guess is those legislators would not be located in Douglas County.

Godot 5 years, 6 months ago

Read the intangibles tax form. It is an example of taxation at its worst. I must agree with those who have said it before, Boog has never met a tax he didn't like, and the more it singles out and punishes productive and independent individuals and businesses, the better.

Godot 5 years, 6 months ago

Note that "accounts receivables" are subject to the intangibles tax. For those of you who are not familiar with this term, this is the amount of money your customers owe you because you have been kind, or studid, enough to extend them credit, or time to pay their bill for goods and services you have already rendered to them.

If the city begins collecting this tax, I will simply put an end to having "accounts receivables." If the city is going to tax the meager interest I make off of allowing people to use my time and money to purchase their goods, interest that does not even make up for the cost of billing, and the bad debts, I will stop extending credit. Forget 30 days, 60 days and 90 days past due. I will say, pay up now, cash on the barrell head, and this will apply especially to the City of Lawrence, oh, yes, and the County and KU, slow payers that they are. No cash, no check, no credit card, no service.

oldgoof 5 years, 6 months ago

Marion responds to Goof : ". . . your question is merely spin as my parts sales were wholesale; dealer to dealer/dealer to manufacturer, etc and therefore tax exempt in the first place." . . Marion, I wasn't trying to spin anything but was legitimately interested. And there are some interesting arguments in the ability to fairly enforce various taxes.... including intangibles vs sales or income or real estate. I understand that 'wholesale to wholesale' transactions should be exempt from sales, but I know you would have to agree that the definition of "just who is wholesale" is an interesting question in itself. And that other firms, and especially web-transactions (not you of course) evade sales tax by characterizing transactions as wholesale to wholesale. .. Actually, I am probably philosophically supportive of a European-styled VAT tax, instead of sales, because they seem to me to be more consistently (fairly) enforced, in part., and make more sense. But that would shake up financing of our various levels of government enough that it will never happen.

. . .

Taxing intangibles is a sticky wicket, and that is why many counties have forgone this. But the concept that intangibles represent wealth, and that Boog wants to tax the wealthy is not lost on me, the non wealthy, who would pay some tax himself.

oldgoof 5 years, 6 months ago

Oh, and Marion, I too have never had a question used in one of these chats. I long ago stopped posting them, presuming the LJW staff had an overall outline they wanted to use. I was surprised to see so many questions by familiar names here.

Sigmund 5 years, 6 months ago

What is so sad is the people who this is targeted at are the very people you want to live in your community. They own businesses, live within their means, don't drain city services, and are the ones who will have the easiest time avoiding the Boogeyman tax. They are the ones that have the resources to hire lawyers, accountants, and real estate agents and can move their "tax situs" the heck out of Lawrence. It is the middle class who can't afford to sell their homes in a depressed market who are trapped and forced to pay.

Which brings up the broader point here. The real estate market in Lawrence is depressed, this means the appraiser will have a difficult time raising real estate taxes. "Smart growth" led to a fall in sales tax revenues and declining populations. The Business Czar and living wages has chilled any new businesses coming to town. Many small local businesses downtown can't afford the rent and taxes and make a profit at the same time. The school board is unlikely to curb its appetite for more sports facilities increasing that tax bill. The empty buses are costing over one-million-five-hundred-thousand dollars ($1,500,000) each and every year, year after year. The past Kommission's wasted our rainy day fund, and on't look now but it is pouring. As they don't have the will to cut city employees and/or unnecessary services, this means a tax increase.

BTW, who are the "wealthy?" Generally, they are older people who have worked all their lives and have learned to live within their means and saved all during their lives so they can afford retirement. The last time I looked, the a very large number of the "wealthy" were widows whose spouses had died. They are using their savings to enjoy their golden years. This is different from those with "high incomes" who are mostly male in their peak earning years.

But I do hope that the Boogeyman continues with his class warfare approach to local politics. This is so crass and heartless that even the majority of aging hipsters baby boomers of the looney left, many who have been saving hoping to retire themselves, will reject him in the next election.

Sigmund 5 years, 6 months ago

Let's say you wanted to attract new residents with high incomes and those wealthy retirees to your community from the surrounding area. You hoped to increase sales tax revenues, add new expensive homes to the real estate tax roles, increase the customer counts in locally owned restaurants, sell and register more expensive cars, increase the number of customers for local doctors, lawyers, coffee shops, lawn care, hometown banks and local charities. Would you have the largest sales tax in the State combined with an intangible tax that no surrounding community had or, have a lower sales tax than surrounding communities and no intangible tax?

You want to see the people the Boogeyman is after, its no Mystery! If they can sell their bookstore do you think they will stay and let let their savings be taxed? Quoth the raven, `Nevermore.' http://www2.ljworld.com/news/2007/oct...

monkeyhawk 5 years, 6 months ago

Ok Hawk, you keep asking and I alluded to it earlier, so I will spell this out since it seems to not have grabbed anyone:

"Some kinds of interest are exempted, including individual retirement and Keough accounts, and there is an exemption for low-income seniors and people with disabilities."

Read the very last part....it appears that Boog will not be imposing this tax on himself. I imagine anyone with a hang tag will be exempted.

Godot 5 years, 6 months ago

Uh, Max1, your post indicates there are two owners of Boog's house, yet he is unmarried without children. My guess he and Brenda and her hubby split that tax up in some way. Just trying to keep the math straight.

Godot 5 years, 6 months ago

Government employees, in general, will skate by quite nicely without paying this tax since they all have these nice, qualified plans provided by their employers to shelter their savings from an intangibles tax.

Perhaps Boog is hoping that people who actually have investments and savings that are not in a qualified retirement plan or in bank stock (yes, bank stock is exempt) will move their money into municipal bonds to avoid the tax....and guess what city will have to sell lots and lots of municipal bonds to finance downtown redevelopment, build a sports complex and purchase several acres of polluted land?

bearded_gnome 5 years, 6 months ago

wonderful questions all Siggy. too bad they weren't posed. would have made interesting reading.

yes, an intangables tax does run counter to growth, jobs, and increasing the tax base. it could be argued that given the actions of avoidance, the choices made by potential tangables taxpayers, that you would certainly lose much more than you'd gain. however, it is clear that he has no consideration for the bottom line, but rather is purely interested in punishing the rich. very very sad. I hope this idea just goes away. also, I can't imagine him getting a majority on the commission to support this. however, be warned that if next city election the loons/grass roots aliens/plc nudnicks get two seats...LOOK OUT!!!

Godot 5 years, 6 months ago

Pogo, the intangibles exemption for disabled requires disability and an income of less than $20,000, as I read it. So, no, that would not give Boog an exemption. I do not think he zeroed in on this tax for his own benefit, I think he did it because of his dedication to redistribution of wealth and social engineering through taxation.

Godot 5 years, 6 months ago

This is a meaningless gesture, Boog's wink and a nod to the far left to let them know he is on their side. I doubt the rest of the commission would go along with it, but, who knows? If it does, it will result in little net revenue for the city, and lots of bad rep.

Yabut 5 years, 6 months ago

Happy "National Save for Retirement Week!" http://www.nagdca.org/retirementweek/

What an A$$!

Godot 5 years, 6 months ago

The interest and dividends that accrue in insurance policies would also be subject to the intangibles tax. Neither the Feds nor the States collect that income until and unless it is withdrawn.; the companies are not required to file reports of such. How will that be enforced and confirmed?

This is a stupid tax that is an excellent candidate for repeal by the legislature.