Advertisement

Archive for Sunday, May 15, 1994

T MIX WITH TAX HIKE

May 15, 1994

Advertisement

Each beep of the register at a grocery counter could mean an extra cost -- in all an insignificant expense of nickels and dimes for some, but a change of lifestyle for others.

Pat Slick's eyesight is such that even with thick spectacles, he can make out few facial expressions, perhaps a broad smile or pronounced grimace.

But close up, he can read the cash register receipt -- well enough to know that sales tax on groceries eats up a good portion of his disability income.

The last thing he would like to see is another cent added to the bottom line for each dollar he spends. Douglas County and the city of Lawrence have proposed doing just that to raise money for a new jail, improved parks and expanded health facilities.

One bottle of Head & Shoulders shampoo cost him 19 cents in sales tax Thursday. Soon it might be 22 cents.

The most common argument against sales tax is that it's regressive. That is, it costs the poor more than the rich.

For example, if two Lawrence individuals each consume $150 of groceries in a month, they would pay $10.35 of sales tax under the proposal. If one makes $1,600 a month, that's 0.6 percent of his income. If the other makes $400 a month, that's 2.5 percent.

Slick and two other Lawrence people who live on fixed incomes discussed in recent interviews how the tax would affect them.

A 59-year-old woman known as CharityGrace said she raised two children on food stamps. The former school librarian has been on and off public assistance. She plans to volunteer soon as an instructor for a course on how to stretch food stamps, which are not taxed.

CharityGrace said the city and county wouldn't get an extra cent out of her with their sales tax.

"It just means I will buy less," she said. "I brush my teeth with baking soda. You learn these little things."

Her main objection to the proposal is what the revenue ostensibly would go toward, especially the jail.

"I wouldn't mind the sales tax going up if it did something constructive to reduce the necessity of jails," she said.

Pinching every penny

Slick, 46, is a gadfly for exempting groceries from sales tax in Kansas. The East Lawrence resident is known among some legislators by name and issue.

When his disability required him to seek public assistance in 1979, Slick said he learned how to live on slender means. He quit smoking and began walking everywhere he could.

His income is about $600 a month, he estimated. Although he is more comfortable than most people on the face of the Earth, he said, he has little money left at the end of the month for savings or entertainment. A one-cent sales tax seems small on its face, he said.

"But it's like radiation," he said. "It's five dollars more (a month). That's five quarts of milk, five loaves of bread, $5 of prescription drugs, $5 of bus fare, $5 of entertainment."

A selling point for the sales tax proposal is that local taxing units could lower property taxes. What kind of bargain is that for someone who owns no property, Slick wonders.

"We're talking about a 6.9 percent tax on baby formula," he said.

Rep. Betty Jo Charlton, D-Lawrence, said chances were slim for legislative approval of a grocery exemption for sales tax.

"As the economy goes up and down, people still buy food," she said. "It's the most stable form of income the state has."

The county has no control over what is exempted or included under a sales tax, Douglas County Administrator Craig Weinaug said. But voters will choose in November whether there will be a county sales tax at all.

Raise one, lower another

A reduction in property tax will be attractive to most voters, officials hope.

High residential property taxes are a bigger evil against people with low incomes than sales taxes, said David Burress, a research economist at Kansas University.

Studies show that as incomes rise, housing costs as a share of that income fall, he said.

Further, he said, if property taxes come down, housing will become cheaper for renters -- who typically have lower incomes than owners.

"Most theories of tax shifts say that property tax on rental properties are shifted to the renter," he said.

So who loses the most under the sales tax proposal?

Students, he said. Students buy a lot of consumer goods, and because they live here for a short time, they will not feel the long-term effect of a property tax reduction.

Slick wouldn't buy into Burress' theory that property taxes hurt low-income people more than sales taxes.

"If you reduce property taxes, those reductions are never passed on to renters, so the rich get richer and the poor get poorer," he said.

Brian Nelson, 33, wants to help others learn Braille.

A brain tumor and resulting surgeries since he was 13 rendered Nelson legally blind. He lives on $446 a month in Social Security income and $49 in food stamps.

He estimates that he spends $150 a month on goods and services that would be taxed. That means he would pay $1.50 more a month under the proposed increase.

The increase wouldn't bother him too much, he said; tax dollars help pay for the programs he uses.

"It's just something I guess we're going to have to live with," he said.

Commenting has been disabled for this item.