Rethink sales tax holidays

Rethink sales tax holidays

Gazette Column
Sales tax holidays like the one happening in Iowa this weekend may sound nice, but they aren’t good public policy. And, yes, I can already hear groaning from the parents and grandparents reading that first sentence. Bear with me. For those who are unfamiliar, for the past 16 years, Iowa residents have been given two days in August to purchase various back-to-school items that cost under $100 without paying sales taxes. In addition, since 2000, the legislature has mandated that all retailers participate. Supporters of these holidays assert the incentive stimulates the economy by encouraging shoppers to purchase more of the goods included on the state’s tax-free list, even if some are impulse buys. But, research has time and again shown this to be false. The New York State Department…
Read More
Vilsack support of Branstad water quality proposal no surprise

Vilsack support of Branstad water quality proposal no surprise

Gazette Column
Tax exemptions should be on the table The urban and rural divide is alive and thriving. The response to an appearance this week by former Iowa governor and U.S. Ag Secretary Tom Vilsack at Gov. Terry Branstad’s news conference announcing a possible extension and expansion of a penny sales tax now funneled to school infrastructure proves it. Branstad’s proposal is to extend a one-cent sales tax earmarked for school infrastructure and set to expire in 2029. The plan would keep the tax in place for 20 additional years, through 2049. While schools would continue to earn proceeds from that tax to a certain cap point, about three-quarters of future growth would be funneled to conservation efforts that help reduce farm chemical runoff and, in turn, improve Iowa’s water quality. Some…
Read More
Think LOST stinks? Hold your nose, blame lawmakers.

Think LOST stinks? Hold your nose, blame lawmakers.

Gazette Column
No one wants to pay more taxes, but sometimes it really is the best of the bad options. When Johnson County voters flip their ballots this November, they’ll be asked if they are willing to increase sales tax by a penny for each dollar spent. If your gut instinct is similar to mine, the pencil will immediately gravitate toward the “no” oval. Sales taxes are among the most regressive rate options for revenue generation. Because they are levied at a flat rate, and because spending as a share of income falls as income rises, sales taxes inevitably take a larger share of income from low- and middle-income families than they take from those in higher income brackets. In other words, all saved income is exempt, while all spent income is…
Read More