Recession not time to raise taxes
By Beth Cody, Writers’ Group member
Iowa City Press-Citizen
Wednesday, April 8, 2009

Here we go again. Didn’t we just raise our sales tax a year and a half ago? That time it was for new school buildings (never mind that exploding property tax receipts from the increased residential base more than covered the cost of the buildings).

Now we’re told we need flood mitigation measures costing $150 million. Whether we actually need all of the proposed projects is a matter for debate – but raising taxes during a recession isn’t the right way to pay for them.

Why didn’t city and county governments put something aside during the good economic years when property tax collections were rising at double-digit rates?

Now that the economy has tanked, we are all suffering. Many people have lost jobs, local businesses are struggling and closing their doors, and most people are putting off “wants” to budget for “needs.”

But local and state elected officials are telling us that they really couldn’t care less about our troubles. Their response is to turn the screws even harder, raising not just our sales tax (a regressive tax that hurts our poorest citizens most deeply), but raising property taxes and income taxes as well.

First, Iowa City residents will likely see a 5.6% increase in property taxes. This is an increase of $60 per year for the owner of an average-value house – on top of last year’s conservation bond ($50) and usual rate increase. And Governor Culver wants to reduce the Homestead Property Tax Credit, an increase of more than $65 annually.

Johnson County residents already pay the highest property taxes in the entire state of Iowa, about $2,400 per year. But no problem, just pile on some more.

State officials also want to repeal our deductibility of Federal taxes on Iowa income tax returns. Incredibly, the state Orwellians are calling this a “tax decrease”, even though more than half of Iowans will see their taxes increase.

There was talk of instituting city income taxes as well, and this issue will certainly be revisited.

Each one of these tax increases is referred to by proponents as “only” some hardly-noticeable amount. But the increases are yearly, cumulative and compounding – and are on top of an already-massive tax burden.

Federal and state income taxes, Social Security and Medicare taxes, sales taxes, property taxes, motor vehicle licenses; all the various taxes we pay already claim about 42% of our income. And still it’s not enough.

Now it’s the sales tax increase (“only a penny”). If it passes, our sales tax rate will have increased by 40% in two years.

Is a 40% tax increase reasonable? A longtime local business-owner told me the other day that he remembers when the sales tax was 3%. Now it’s twice that and the median household pays over $2,000 a year in sales taxes. And still not enough.

Government’s job is apparently not to look out for the welfare of citizens. It is to use every means necessary to separate us from the money we earn. While we are cutting back, our local government is wasting our money on projects like the infamous $80,000 sculpture.

There are other sources for flood mitigation funding. The state of Iowa has already allotted $56 million dollars for disaster relief. And there are trillions of “stimulus” dollars just waiting to be claimed in Washington – so much money they literally can’t spend it fast enough.

Culver, Harkin, Grassley and Loebsack should get in line and direct some of the pork our way. We will end up paying for that as well – let’s at least put it to use.

A recession is not the time to raise taxes. It will certainly prolong the downturn, and probably make it worse. People who are paying more in taxes have less money to spend to stimulate our economy the real way: by investing and starting new businesses and buying products and services that create jobs.

It’s time to say “enough.” Join Ax the Tax supporters April 15 at 11:30 a.m. on the Burlington Street Bridge for a “Tea Party” to let local officials know how you feel about their callousness toward already-struggling taxpayers.

We have a chance here to hold back the rising tide of taxes. Seize the chance: Vote “No” on May 5.