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

Sigmund

Do you see it as your job to tax the successful fiscally responsible Citizen’s of Lawrence in order to provide services for those that have less?

robdew

As an attorney, can you speak to the legal principles that allow cities or state to tax assets outside their boundaries? I don’t understand how this isn’t the same as Missouri taxing milk sold in Nebraska.

Bowhunter99

Non-growing sales tax revenue is a sure-sign that people has no more money to spend, let use to pay for more taxes. Why can’t you and the city commission run the city with a budget that reflects the current income streams the city has?

justthefacts

Boog, first off let me say that I really like you as a person, really. But honestly, can you please stop trying to figure out ways to raise more money and instead start figuring out ways to cut down on government spending (and interference in private matters)?

This latest tax idea (intangible tax) credited to you is simply insane. In a time when private savings should be encouraged, and the middle class pays more of its income with less increases in said income, why would you want to do anything to further strain the finances of people who can’t figure out whether they can afford to pay utility bills each month? Why can’t city (and all) government start learning to live within its current income? If you want people to do that (not overspend or live on credit) shouldn’t the government also tighten its belt!? Or do you think that raising (and then spending) more tax money will somehow help keep middle or lower income people living in Lawrence? If so, please explain how that might work?

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.