Sales tax creates unfair burden

According to business professor James P. Guthrie, “quality of life” is a major pro-business idea (“Quality of life is pro-business,” Lawrence Journal-World, April 12). Coincidentally, professor Guthrie included a recommendation that, “our City Commission should consider investments in recreational opportunities” in his column on the same day that the following bold headline appeared on the front page of the Journal World: “Survey: Ice rink wanted in city.” The sub-headline declared, “Most respondents support tax increase for more facilities.”

This so-called “scientific survey” follows closely on the heels of the current mayor’s recommendation that a nearly 14 percent increase in the local sales tax be placed on the ballot. This huge increase would raise the sales tax in Lawrence from 7.3 percent to 8.3 percent. The mayor would apparently like to use a large portion of revenue raised by her tax increase for a sports complex.

Several problems are inherent in the proposed sales tax increase: (1) low and middle income Lawrencians would bear a disproportionate burden of the tax compared with the wealthiest citizens, (2) small retail businesses would be negatively impacted, and (3) given the large tax now paid on clothing, food, and other consumer goods in Lawrence, local government can no longer turn to a sales tax increase every time a citizen group would like an amenity such as a sports complex.

The poor, the middle class, and small businesses cannot continue to absorb the impact of incremental increases in sales taxes. Increases in regressive taxes, such as sales taxes and property taxes, in conjunction with reduction in progressive taxes, such as capital gains, individual income and corporate taxes, have placed the largest burden for funding state and local government on the poor and middle classes. In Kansas, individuals in the lowest income group pay approximately 12 percent of their income in state and local taxes. The top 1 percent of income earners pays approximately 4.5 percent of income in state and local taxes.

The scientific nature of the referenced survey depends upon one’s definition of “scientific.” Of a sample of 2000 mailed surveys, 412 (20.6 percent) were completed and returned. It would be interesting to know the demographics of the survey respondents (e.g., income level, and occupation) versus the demographics of the entire city. Generally, more affluent citizens respond in greater numbers than low-income citizens to these types of mailed questionnaires. Were aggregated responses weighted to reflect the actual population characteristics of Lawrence?

Furthermore, most people have not had an opportunity to engage in a meaningful discussion of the current tax structure. Without the right information, it is not likely that respondents to a survey, or citizens in general, fully appreciate the “regressive” nature of the Kansas and Lawrence system of taxation. Maybe it is time for our community to have a conversation about city revenue, expenditures and who is bearing the greatest burden.

– David E. Kingsley, a Lawrence resident, is chairman of the Taxation and Budget Policy Committee for Grass Roots Action, a nonprofit political organization whose mission is research, analysis and education regarding local and state government issues.