Here we go again with "fair share" undefined

President Obama has been speaking of "fair share" with regard to taxes, but as many other proponents of "fair share" he does no more than talk about percentage of income paid in taxes.

But this is the wrong argument.

Suppose we have a small town with most people earning a decent income and one person earning over a million dollars a year. The town is small enough that it uses the county sheriff for law enforcement, the regional fire department for fires and first responders, the regional school system, and the county library. Its only major expenses are its streets and a city park. All of its revenues are paid by property taxes. The property taxes are based on market value.

So what is a fair share for everybody?

The millionaire lives in a house whose valuation is such that he pays five percent of the city budget. The town is large enough that most people pay one percent of their income in city property taxes. However, the millionaire only pays a half percent of his income.

Now let's assume that the millionaire earns all of his income investing online in national corporations. He doesn't use any of the city services more than anyone else and maybe even less. In this case, isn't his paying a larger portion of the city taxes a fair share irrelevant?

On the other hand, let's assume that the millionaire earns most of his income being the CEO of a large company in the state. What is his fair share of tax at the state and federal level? He is now using a long list of government services, sometimes directly and sometimes indirectly. If he depends on moving goods from place to place, isn't his income dependent on a good road system? If he has many educated employees, isn't his income dependent on a good school system that will educate future employees? On and on it goes that this millionaire is dependent on a long list of government services to be successful, even some he doesn't like. For example, if he processes food the state or federal inspections may seem bothersome, but he also wins because his customers have more assurance of the safety of the food his company produces. Few have any idea what his "fair share" of state and federal taxes is.

It could be far less than some fixed percentage. It could be a far greater percentage than most people pay. Nobody knows for sure and very few are even considering the real meaning of "fair share".

Snow removal – something only higher taxes can buy

To avoid taxes on residents for clearing sidewalks, cities by law expect that residents clear the sidewalks in front of their houses.  But to do so one must spend time and energy clearing the sidewalk or pay somebody else to clear the sidewalk; either one is a tax by inaction.  If one has a friendly neighbor volunteer to clear a walk, that time and energy is a tax on that neighbor.   Add to the time and energy the costs of snow shovels, ice chippers, snow blowers, and ice melt or sand.  Oh yes, gas and oil for the snow blower.  And in some cases heart attacks or muscle pain.

All of this is inefficient and more.  Hired snow clearers do a couple of houses in one area and move on to another.  Individual homeowners may or may not clear their walks at the same time or even on the same day.  Depending on the size of the boulevard, the sidewalk snow may be thrown into the yard, to become melt water in warmer weather, run across the sidewalk, and then freeze in colder weather.

People who might normally walk now drive for their own safety and comfort.  Parents who are concerned about their children's safety demand school buses, even for walks of less than a half-hour.  School buses are operated with tax money.

This cycle can be repeated several times in any given snow season, the snow pile getting higher and the frozen melt getting thicker.

Wouldn't it be more efficient and cost effective if the city were to remove as much plowed or blown snow as possible after each storm?  The state certainly does it on bridges and underpasses.  What if as soon as possible after plowing, the city came back with large snowblowers and trucks and removed the snow on boulevards?  What if next the city came back again and cleared and removed the snow from sidewalks?  It may be a lot of money up front, but the overall savings to the community might be very large.

If all else fails, let's resort to the argument that snow removal creates jobs.  Gosh, if there is tax money to induce a business to move to a city to "create jobs", can't there be tax money to "create jobs" to make a city more livable?

The bill for the indirect tax to the city is in

My truck wasn't ready yesterday because the mechanic ran out of time. The dealer gave me a loaner for overnight, and I went back this afternoon to pick up my truck.

As I wrote yesterday, a tie rod had to be replaced. The sleeve was on the ball joint, and the latter had to be replaced also. I was a bit pessimistic about the total bill. It was $594.13.

I went to the filing cabinet to look up our real estate taxes for Duluth. For this year and last we will pay about $600. Add the tax for the auto repair and that is $1200 in taxes to the city of Duluth for two years. I think I would rather pay that directly and have better streets.

Would you believe that the dirt road that runs in front of our cabin is in better shape than some of the streets around our house? And we pay a pittance in real estate taxes to the township. Maybe we should go back to having dirt roads in our cities. When the snow trucks come by, they will smooth the streets.

I'm paying "high taxes" again!

I brought my truck into a Ford dealer because it has been squeaking on the right front. Tuesday I could push down on the bumper and the truck sounded like a whimpering puppy. Today I pushed down and heard nothing. On my trip to the dealer, I heard nothing.

The service representative just told me there was something, expensive somethings. A boot on the in the suspension was torn. When it was cold and dry it squeaked. Today it is warm with standing water on the roads. The boot is lubricated with water and doesn't squeak.

Additionally a tie rod is loose and has to be replaced. And, of course, the front end has to be realigned when all the repairs are made.

As of this writing, I don't know the full cost, but it will be over six hundred dollars, eight wouldn't surprise me.

How do front ends get damaged? From potholes. Why are there potholes? Because we won't pay enough taxes to build roads that will stand up to harsh weather, and we won't even pay enough taxes to repair the roads we have in a timely fashion.

So, we have to pay for the condition of our roads in another way. Either way, we are being taxed. Interestingly, this repair will be more than we pay to the City of Duluth in real estate taxes each year.

Snow, new taxes!

Here are a couple of pictures taken after I spent over an hour removing snow in front of our house that was dumped on the sidewalk by snowplows.

This is after I used an ice scraper to break the packed snow up, blew the snow up over a high pile in my yard, and finished the job with a snow shovel. You can see what the neighbor has yet to do.

The clear spot farther down the street was done by a neighbor with a bigger snowblower than I have. I don't know how long it took him, but he didn't do as many lots as he does when the snow is fresh.



Here you can see how high I had to throw the snow. Granted that the yard is sloped, but the snow is at least four feet deep as you can see from the neighbors railing. Note also that the snow is not pristine white, but brown from the street slush. No way can I throw snow over this for more than a few minutes at a time. One could consider having to have a snow blower an additional tax. Let's see, I think this little guy cost $700 or so. If it lasts 14 years, then that is an additional $50 a year tax.

Let's see, if we assume $7/hour for general labor and $280/year real estate tax to the city, then I am paying an extra 2.5% tax each time the city plows move snow from the street to the side walk. If this only happens four times per season, I should be so lucky, then I am paying an extra 10% tax each winter. Add the snowblower cost, then I am paying about 28% more taxes just for snow blowing.

Thanks a lot, "No new taxes" proponents. May you have a higher snow tax than I do.

Shortchanging education leads to big bucks health care

We too often look at parts of our society as unrelated to other parts. We link property taxes to education and do not properly support it to give our children a truly superb education. For example, we focus on reading and computation, but neglect art, music, and critical thinking, skills that promote and lead to much better thinking abilities.

As a result many of our children do not develop the skills that are in demand in our economy. For these, we spend an inordinate amount of time and money subsidizing corporations to create jobs.

But many jobs are going unfilled because there are not enough people to do them. This leads to higher demand for those who can do these skilled jobs which leads to higher wages for these employees.

A prime example of this is the shortage of doctors. Recently St. Mary's Duluth Clinic said it needed 139 doctors. You know that those doctors who are available have a long list of employment choices. To get them, SMDC is going to have to pay a lot.

Since health care organizations have to pay a lot for doctors they are going either pay others less or raise their fees, often both. As fees get higher and higher, health care premiums go higher and higher, often outstripping inflation. As premiums go higher, fewer people can afford health care.

When children don't get adequate health care they don't do as well in school. Therefore we need more money for schools to adequately educate these students. But we don't want to pay the taxes to do so because our health care premiums are so high.