Leatherneck Blogger

Use Tax

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(The following Talking Points were delivered to the Cape Girardeau County Commission as testimony at a Public Hearing August 23, 2013, against placing a County Use Tax on the November 2013, General Election Ballot)

For the Record:

My name is MSgt David A. Larson, United States Marine Corps Retired. I am speaking on my own behalf as a taxpayer in Cape Girardeau County without any affiliation to any groups or organizations.

1.  When people come together to live in a community they form a social contract among themselves to preserve order, protect private property and set up access to public services (OPS). In order to execute this contract a community will institute a governing body delegating some individual authority to the government for the sake of efficiency. The citizens within the community become funders of the government they instituted and are now known as taxpayers. Therefore, taxes are necessary.

2.  This whole dispute surrounding the Use Tax is window dressing for the real debate of self-governance versus centralizes government. Whenever a governing body steps outside of the OPS model it begins to increase centralization of government at the expense of self-governance.

3.  The debate for the Use Tax as a way to level the playing field for licensed Missouri car dealers and in particular the licensed Missouri car dealers in Cape Girardeau County is an appeal to pity argument. This red herring was devised to distract the attention of the taxpayer from consolidation of authority at the County level.

4.  There are three scenarios I can think of in regards to the Use Tax issue. Since I do not run in the circles of folks who can pay one thousand seven hundred dollars in use tax for a car or truck ($170,000), I will keep my example to a figure closer to the median income in Cape Girardeau County of $47,000 per year. Besides, it is easier to keep track of three digits than it is four.

5.  Assuming an average priced pick-up truck of twenty thousand dollars ($20,000). The proposed Use Tax ordinance would require the Department of Revenue to collect for the County two hundred dollars from the buyer as he or she registers and titles the vehicle. Who are the real winners and losers in a purchase of a new truck?

a. Assuming a local dealer lands the sale:

1.  Winners: County Government and Dealer

The dealership increases its top line sales by $20k and the County gets $200 in taxes.

2.  Loser: Taxpayer

The taxpayer has reduced his or her assets by $20.2k at a minimum

b. Taxpayer purchases the new truck from a licensed Missouri Car Dealer outside of Cape Girardeau County for $19.8k because of free market forces:

1.  Winner: County Government

The County government receives $198 in taxes

2.  Loser: Taxpayer

The taxpayer is out $198 on top of the purchase price.

c. Taxpayer purchases the truck from someone other than a licensed Missouri car dealer for $19.8k:

1.  Winner: County Government

The County government receives $198 in taxes

2.  Loser: Taxpayer

The taxpayer is out $19.8k plus $198.

6.  The loser in every case is the taxpayer and a dealership only wins when its products are competitively priced in the surrounding area or it brings in customers by offsetting its price differential with something else of value to the taxpayer.

7.  In every case the County Government wins by collecting taxes. This centralizes government at the County level.

8.  So, let us revisit the second scenario. Should sales for local Missouri licensed dealers drop because taxpayers are going outside the county to buy a truck, does the County Government then write a new ordinance to “levy an import tax” on the vehicle to level the playing field for Cape Girardeau car dealers?  When sales drop again does the County write another ordinance to levy a punishment tax on “blue-eyed people” out of fairness to the car dealers in Cape Girardeau? Remember the loser all three scenarios is the taxpayer.

9.  If this were really such a great deal and huge profits were being made from taxpayers going out-of-state to purchase new trucks, there would be dealership after dealership stacked up like corn rows along the roads and highways in states bordering Missouri. This has not happened in East Girardeau along 146 in IL and there does not seem to be any new construction of car dealerships on that side of the Mississippi River.

10. The Missouri Association of Counties, a nonprofit funded by taxpayers and hardly a nonpartisan lobbying organization for county governments, claims Cape Girardeau County will lose $250k if a Use Tax is not passed. Where did the money go? Not having a Use Tax in place does not cause the County to lose revenue. The $250k is still in the pocket of the taxpayer who will buy other goods and services generating sales tax collections.

11. An elected government official said on August 20th, 2013, “But we shouldn’t support rules that incentivize you to go spend your money in other states.” That official is absolutely correct. Under the OPS model no authority from the people was ever delegated to government to impact the free market. In other words, the proper role of government is to protect equal right, not to provide equal things.

Man is superior to government and should remain master over it, not the other way around. There is one simple test. Do I as an individual have a right to use force upon my neighbor to accomplish this goal (in the case of the Use Tax leveling the playing field)? If I do have such a right, then I may delegate that power to my government. If I do not have that right as an individual, then I cannot delegate it to government, and I cannot ask my government to perform the act for me.” -Ezra Taft Benson

I, therefore, have the right to gain private property. And that gives me the right to dispose of that property how I chose without interference from government.

12. Until recently, there was a finite amount of money in the economy. The claim of increasing taxes to increase tax collection is just flat out wrong. An increase in one or a new tax, given the limited amount of money in the market, will cause an offsetting decrease in tax collection in another area.

13. So, this is really about whether the taxpayer wants a government to direct him or her on how to dispose of his or her money by centralizing authority at the County. Or does the taxpayer want to be self-determining in the spending of his or her money.

14. The taxpayer is totally discounted in this whole Use Tax issue. The rush to get this Use Tax on the ballot before some artificial deadline is bad policy and just plain wrong.

Written by Leatherneck Blogger

September 10, 2013 at 06:00

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