Saturday, April 08, 2017

To Fee or not to Fee

It's April, so taxes are on many peoples minds. Two key events are happening very soon and I'm overdue for a look at local taxes. Everyone is familiar with the April 15th (actually 17th this year) deadline for filing Income Taxes. With the popularity of electronic filing and tax return loans about the only people that will be filing at the deadline are those that owe taxes. There is another special tax event that also happens this time of year - Tax Freedom Day. That is the day that you have earned enough money to pay all the taxes you will have to pay for the year. Up until then you are really working for the government. This day will obviously vary on a personal basis. On average, most Americans will have earned enough to pay their yearly tax load by April 24th. Texas gets a little break here as Texans on the whole will be off the hook by April 17th. San Angeloens, which are among the highest taxed Texans, probably can't really celebrate until the end of the month. Using the Tax Freedom figures, we work between a quarter and a third of each year just to pay for all the government we're getting. Well almost all of it anyway. Time to look closer.

First off, we need to be clear about I mean by tax. According to, a tax is "a sum of money demanded by a government for its support or for specific facilities or services, levied upon incomes, property, sales, etc." This includes taxes that masquerade as fees, penalties, and surcharges. A good local example is the  Stormwater Fee. In 2016 the budget says they collected $2,620,000 in Stormwater Fees. By the standard definition that is still a tax. It is a tax on property that is roughly equal to 9 cents of property tax. It's a tax on hard surface area, not property values, and will hit businesses harder than residences but it is still a tax burden on property. It is just a stealth property tax. These types of fees are often ignored when figuring tax burden or when tax freedom day happens but they are real taxes that must be paid and they come out of the same pocket as income tax, property tax, gasoline tax, sales tax and every other tax. At the end of the year, your average tax payer will have worked over a third of the year to pay his "fair share" of taxes. And there is a reason I put fair share in quotes. The tax burden is not equal or fair across the population. There is an ongoing debate on what would be a fair way of taxing people but the bottom line is that taxes are high and mostly paid by the middle, working, productive class.

So why am I focusing on taxes today? There are good local reasons. We have a very big city election coming up in just a short while. Up to 5 seats will change in this May's election. The Makeup and character of the council will be very different. And taxes need to be a top election issue. Every other issue is either directly or indirectly tied to taxes. And we need to maker sure that the candidates talk about everything that is truly a tax. In the past dozen years  or so the City Council has reduced the city property tax by about 10 cents. In that same time frame they introduced the Storm Water Fee, a stealth tax on property that is equivalent to about 9 cents of that property tax reduction. They have increased several fees which shifts about 1 cent of property tax to businesses. And the businesses then have to pass the extra tax expenses on to their customers. We haven't even gotten to the murky area of utility bills and the new trash contract. The local tax load on paper has dropped over the last few years and it looks good. On paper. The truth is that San Angelo citizens still have one of the highest tax burdens in the state and even though what City Hall calls taxes have went down, our community is paying a higher percentage of its take home pay to run the city government then it did a decade ago. 

This election, ask the candidates the tough questions and elect candidates that will reduce the total costs, the real taxes on our community, not just the ones labeled taxes in their press releases.

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