City of Tucson residents are currently paying four separate sales taxes for the repair and maintenance of our streets, Until the third sales tax for the County wide Regional Transportation Authority (RTA) was passed about fifteen years ago there were only two sales taxes for transportation, one that went directly to the City for general local government purposes, which included the City`s core responsibility for transportation and streets, and a second sales tax motorists pay when they buy gas and which is collected by the State and then turned over to the City. Those who use our streets but do not pay this sales tax are electric vehicle owners and bicycle riders. The fourth tax was created in about 2017 and is set to expire. Prop 411 will create another sales tax to replace the 2017 tax. It should be noted that there has been no showing by the Mayor and Council that the conditions of our streets have significantly improved since the 2017 sales tax was imposed and it should also be noted that the RTA sales tax funded program has in fact accomplished its promised improvements. Furthermore, the assertion of some politicians that all the vague promises made about what Prop 411 will accomplish will not cost any more money is simply not true. If it were, we would not need to vote to pass Prop 411 and create another sales tax.
Why do the Mayor and Council believe the new 411 sales tax is necessary to fund road repair and maintenance? Isn`t it really only because the City has failed for the past two or three decades to adequately fund this core City responsibility out of the original general fund sales tax revenues and these officials think the solution to fix transportation problems is just another tax to collect more money from the taxpayers? That seems to be the inescapable conclusion. Most of our streets today are in as bad or worse condition than they were in when the 2017 sales tax went into effect so why should we expect any transportation improvements with the passage of this replacement sales tax?
The new proposed sales tax is a bad idea for two fundamental reasons. First, the City has not made the case for needing it. The City got along until a few decades ago with fixing our streets without the additional sales tax which was passed in 2017 and there is no showing that the roads are in any better condition after this additional sales tax took effect. At the very least the City should show that the 2017 sales tax increase significantly improved our streets before it supports passage of another replacement sales tax. In addition, we should not pass the new Prop 411 sales tax in the current time of rampant inflation and its adverse economic effect on Tucson residents, especially the poor. The poor cannot be expected to shoulder another tax burden at a time of high inflation.
Almost 25% of Tucsonans live at or near Federal poverty levels of income and the poor are the hardest hit by the current runaway inflation which means continuing price increases for virtually everything including food and other things not subject to the sales tax. This high inflation shows no signs of ending anytime soon. To exacerbate the negative effects of inflation by passing a new sales tax at this time is the height of foolishness.
We all know the poor are the hardest hit by sales taxes as opposed to other kinds of taxes due to the highly regressive nature of such taxes. Regressive in this context means the higher your income the less the tax affects your overall economic well-being and the less income you have the more sales taxes negatively affect your economic well-being. This is because everyone pays the same amount of sales tax regardless of their income. Put another way, upper income people are less affected by regressive taxes, such as sales taxes because a smaller part of their income goes to paying the tax while a greater proportion of the income of the poor goes to pay such tax because they have so little money. For example, if your income is $100 and the sales tax you pay is $.50 the tax costs you .005% of your income but if your income is $300 the .$50 tax costs you only .0016% of your income, a much lower tax rate than the poor person pays. Thus, those working at the U of A or Raytheon, for example, with their higher salaries are less affected by the tax than the poor and is a strong reason for exempting the poor from this new sales tax.
Inflation affects us all, but it has its greatest effects on the poor and anyone else that lives paycheck to paycheck. If you normally have no money left at the end of each pay period and then almost everything is costing more month after month due to the increases in prices that inflation entails, life become worse and worse for you from an economic standpoint and that affects every aspect of your life including your sense of well-being as inflation eats away at your ability to cope financially.
Unlike the City`s proposed 411 sales tax, the Federal Income Tax in our country is highly progressive meaning the less income you earn, the less the rate of tax you pay. Obviously, this is very important for the poor. In fact, most poor people do not pay any income taxes at all and those with dependents are also given federal benefit payments when they submit their tax returns to help them cope financially. Instead of asking the poor to pay more in sales taxes to pay for roads, why isn`t the City exploring ways to exempt the poor from these regressive sales taxes?
Fair tax treatment of the poor is not limited to the Federal Government. Pima County property taxes for poor homeowners are reimbursed by the State of Arizona for up to about $500 per year to assist the poor. Perhaps the City should consider issuing cards to those who are exempt from Federal Income taxes due to low income as a way to exempt them from the 411 sales tax?
Instead of asking the poor to vote in favor of the 411 sales tax and against their economic self-interest during this time of extreme inflation, the Mayor and Council should stay true to their word of being advocates for the poor and should explore what they can do to make City tax policy more equitable for the poor. The Prop 411 1/2 cent sales tax increase by the City would be about a 5% sales tax rate increase. Also, sales tax increases now, during the highest inflation in 40 years. results in a decrease in purchasing power for all now and forever after because as we know, price increases resulting from inflation are never reversed. Where is the equity for the poor in the City`s position on Prop 411?
Luke M. Abrams – I am retired and have lived in Tucson for approximately 30 years.