Originally Published: January 4, 2004 7 a.m.
The tax recommendations from the governor's Citizens' Fiscal Review Commission are in the news again. Their goal is to spread the load evenly, but their recommendations fall short.
One principle that seems to have faded in recent years is that taxes should be progressive. That is, those who have more should pay more, not just as an absolute amount, but as a percentage. That includes me. I have a slightly above average income, and my taxes should reflect that. Virtually the only way to make tax progressive is to use an income tax on a progressive scale – those with a greater income pay a greater percentage.
We are nowhere near that point now. According to the commission's findings, looking at state and local taxes – income, sales, property and excise – lower income people spend 12.5 percent of their income on taxes. People in the top 1 percent spend 4.9 percent. That is outrageously regressive. Those percentages should be reversed.
Look at those figures again. That is the reality. Never mind misleading statements about how those with higher incomes pay a large percentage of total income tax or pay more in absolute dollars, numbers which don't tell the whole story by themselves. When you look at the big picture – account for all the tax breaks and what people actually end up paying, add in the sales and other taxes – those two figures, 12.5 percent for lower income people and 4.9 percent for upper income people, tell the real tale.
In recent years many people have been sold on ideas of a so-called "flat" tax or national sales tax. Many of those people wouldn't like the results. Look at who really ends up paying what and you will still have higher income people paying a smaller percentage of their income in taxes.
With a progressive income tax, set at a proper rate, with virtually no loopholes, we could abolish nearly all other taxes – sales, corporate, estate, property, etc., etc. There are a very few exceptions such as money from selling your primary residence you'll use to buy your next home.
Local towns and districts need money to pay for their own services, so we would need revenue sharing of the income tax. They could vote themselves an extra amount of tax on their residents, but it still should come as revenue sharing of the income tax, so it stays progressive.
The alternative is the current system which depends on sales taxes, fees and property taxes that, when added up, are regressive. No amount of tweaking of the current system is going to accomplish making the tax burden progressive and fair.
I saw in the paper where once again the police have made arrests in serious local crimes.
They caught yet a third person in the Nov. 30 home invasion, and broke up a string of car robberies. It's not a perfect track record, but generally not long after a serious crime you read about some arrest.
The Prescott police have done this several times lately. Out my way, in Chino Valley, most people know that Chief Pat Huntsman and her crew do a great job. In an area that's growing by leaps and bounds, where crime could be getting out of control, it's nice to know these people are on the ball, helping to keep that safe, small-town atmosphere in the face of such growth.
(Tom Cantlon's column appears every other Monday. www.tomcantlon.com)