…He has erected a multitude of new offices, and sent hither swarms of officers to harass our people…imposing taxes on us without our consent…
Declaration of Independence- 1776
NEWSFLASH to all governing bodies! There is a finite limit of income that is available to be taxed. Theoretically it is 100% of income. Practically, it is a significantly lower percentage of income.
We only feel the need to point this fact out because it is clear that a new tidal-wave of taxation is currently being generated at all levels of government. The excuses are myriad. The effects will be devastating, as are all tax increases especially during economic downturns.
So why all the talk of tax increases when Westerville residents just voted themselves, a majority of them anyway, a 15% tax-cut? Well, not so fast. It is probably just a temporary reprieve if events in Columbus are any indicator.
During the recent Westerville Income tax increase campaign we asked the question repeatedly- What’s the next bite of the apple? When it became legal for cities to charge residents an income tax it was sold to residents initially as a very small bite of the apple which would eliminate the need for the hated (and unbiblical) city portion of the property tax and piggy-back sales taxes. Most municipalities went for a 0.25-0.5% income tax, promising that this would be more than enough to run the city in perpetuity. The cities would never have to ask for more to run at current levels of government. And that’s the rub. Governments used new revenues to grow far larger and more intrusive than any of those early residents who foolishly voted in income taxes could possibly have imagined.
Not so city planners, professional city managers and other government “experts” who have college degrees in such “progressive” fields as Urban Planning, Regional Governance, Public Affairs, etc. The dream of 19th century “progressive visionaries” is now the nightmare of 21st century urban and suburban tax-slaves. It has been only since the mid-20th century that progressives in small to medium-sized cities created and seized de facto control of zoning and planning commissions, which were originally promoted as bodies designed to protect the freedom of use and value of private property. In fact, they have become agents of modern-day government feudal lords, dictating such matters of grave importance as street curb-cuts (vital to the survival of businesses on a street; if you’re in doubt please examine the state of business in the Morse Rd and Rt. 161 “business” corridors in Columbus which have a system of virtually inaccessible “access” roads, another sign of city tyranny; these areas are also dying or virtually dead zones) grass length, the color of house paint used, the storage of boats and other extra vehicles, the type and placement of fences and even the replacement of hot-water heaters. This kind of intrusion costs money and bureaucracies must come up with new revenues to pay armies of bureaucratic “inspectors.” Hence the wave in the late ’70’s and early ’80’s of income-tax increases to the 1% level. Again, that was all that the cities would ever need.
As city governments continued to grow in size, cost and intrusiveness yet more revenue became necessary. And as the resistance to tax increases grows the tactics of city leadership becomes more sophisticated and demonstrative of their desire to thwart the will of a majority of taxpayers (as opposed to the majority of voters, an extremely important distinction). As this article in the Columbus Dispatch demonstrates, cities like Columbus and Westerville use a combination of “special” election dates, usually in August to minimize voter turnout, and targeting voters who are most likely to vote for tax increases and vote in every election no matter when (the dreadful PROS 2000 campaign in Westerville used an August “special election” date with the same targeted voter strategy). Selected quotes from the article-
On the night of the election, Coleman called it the most sophisticated campaign in which he had been involved…
Brad Sinnott, central committee chairman for the Franklin County Republican Party, said timing trumped strategy for tax-backers.
“There’s no doubt part of their strategy was to get this through in a low-turnout, midsummer election.”
Of course, the city denies that election timing is a legitimate complaint-
But city officials insist that they scheduled an August election not for political advantage but because they need the money now.
Of course, that argument crumbles under the weight of the revelation that voter turnout was not encouraged but that…
The campaign’s target audience was the small pool of voters who never miss an election, no matter what time of year it takes place.
Was the strategy successful? Clearly it was, since a grand total of 8.4% of the registered voters (52% of the 16.2% of registered voters, again, NOT taxpayers, who voted) in Columbus were able to impose a 25% tax increase on the residents of Columbus who pay taxes and, worse, non-resident taxpayers who are completely disenfranchised in municipal elections despite paying most of the taxes. And Columbus utilized the implied promise of continued expansion of social welfare spending to entice voters who pay little or nothing in taxes but receive the benefits to vote themselves largess from the public treasury.
As we have pointed out repeatedly here on this blog, cities long ago slipped into the same form of tyranny that American colonists so courageously resisted in the 1760’s through the 1780’s; over-regulation of the backbone of any economy, the small local business (a rapidly disappearing entity in Columbus), and taxation without representation. As noted in the quotations from the Declaration of Independence, taxes are being imposed without the consent of a significant percentage of the taxed. In fact, 42% of non-resident taxpayers (!) pay 53% (!) of Columbus income taxes (reference here) though they cannot vote and have no say in city government. Westerville’s numbers are similar.
What does this increase in Columbus mean to communities surrounding it? Since Westerville employed an absurd “Tax Fairness” argument, based on Westerville residents who had to pay Columbus and Westerville taxes, in their recent successful campaign to both increase the city income tax and shift the whole burden to a minority of taxpayers who both live and work in the city of Westerville (absurdity exposed here) it is conceivable that Westerville could come back to the voters to demand, in the name of “fairness,” that a new 25% tax increase MUST be passed by taxpayers (a majority of whom would be exempt from the increase, just like the last initiative). Since the city is busy using its windfall from the recent tax hike to hire zoning and planning “inspectors” and other bureaucrats to harass churches over building occupancy permits and businesses who want to remodel buildings for occupancy, buy every dilapidated or limited-use building that comes on the market thus squeezing even private small rental businesses aka taxpayers out of the market, just like they did, for instance, to the Westerville Athletic Club and taking them off the tax roles therefore cutting revenues, and otherwise throwing good money after bad on schemes that will destroy the business viability of the south side of town by imposing a Rt. 161 style “access” road ghetto upon its temporary occupants, it will probably find that it needs more revenue sooner than later and the “tax fairness” argument may have to be dusted off and modified for another run despite promises to the contrary. Think in terms of Westerville Public Schools who now claim they “need” nearly 8 additional mills to run the new Taj Mahals they have recently built or between $400 and $600 additional dollars per year from the average Westerville School District homeowner.
What should be done about this mess? Well, the first step is at least being considered. The Columbus Dispatch reports here about a bill that would allegedly restrict the use of “special elections” for the purposes of getting around higher voter turnouts. We think the bill in question is Ohio House bill HB 260 but we don’t know for sure, since the atrociously written story in the Dispatch gives exactly NONE of the important details like the bill number, the sponsors or any serious attempt at analysis in depth.
The second and most important step will require, frankly, a great deal of time, effort and money to get done. The cities and those eager to use the current taxation structure of the cities for the purpose of confiscation and redistribution of wealth through disenfranchised taxation (taxation without representation) will never allow the next step without a major fight. That is, either allowing all TAXPAYERS into a city’s treasury the right to vote in city elections, including tax initiatives, and requiring a number of non-resident representatives in City Councils proportional to non-resident revenue derived or, more simply, outlawing the collection of taxes from those who have no say in city government. No city will be willing to swallow either option (they will immediately hide behind The Ohio Constitution’s “Home Rule” provision) without a fight and no state legislators, being political animals, have stepped up to offer any relief to agrieved taxpayers mostly because they are more frightened of the reactions of cities and corporate campaign donors than they are of the mostly quiescent taxpayers who aren’t currently raising a stink.
A state constitutional amendment initiative will almost undoubtedly be required to fix this. It would be a real down and dirty political slugfest, complete with charges of greed and racism. There would be no major corporate support, since major corporations rely on the tax abatements and other city bribes to buy their support and loyalty. When cities are restricted from collecting taxes from non-residents they will have to cancel the 100’s of millions of dollars in tax abatements that corporations enjoy statewide. Major corporations will put millions into the effort to stop the initiative. The campaign will be dirty and ugly. Corporatate management likes the idea that their employees are forced to pay their property taxes in their stead and without their consent.They hate the idea that employees might figure out that they operate on few if any property taxes while their employees are milked with the help of corporate management who donate to the campaign funds to pass the taxes. Politicians will line up at the corporate trough to collect money that will flow like water in an all out effort to stop the attempt to make them pay their property taxes. Many politicians that conservatives thought were their friends will be exposed as phoneys more interested in re-election than fighting the tough fight to restore truly fair taxation.
Here is a Columbus Dispatch article from late July indicating that 95% of Columbus Issue 1 campaign funds came from corporate donors, among them highly tax abated companies like Nationwide Insurance, Grange Mutual Insurance, Limited Brands, NetJets, Corna-Kokosing Construction, Wolfe Enterprises and, surprise, surprise the Dispatch Printing Company, not to mention several engineering firms, all of whom benefit while their employees suffer. The thousands they donated is a small investment against the millions they don’t pay in taxes. The same holds for smaller cities which line up corporate donations in order to maintain tax abatements.
We don’t tell you this to scare you away from the battle. We are being realistic. It will require real time and effort to get this problem fixed and there will be a lot of hard feelings and possibly jobs lost as employees are fired by major corporations for supporting the effort to make them pay the taxes they have maneuvered cities into waiving. It would have to be a true grass roots effort. Are you mad enough for that, yet?