When I was in Fairbanks in August, I commented to one check-out clerk that one of the great things about the Golden Heart city is that it doesn't have a sales tax. No more, I suppose:
I noted this issue earlier but the reason I raise it again to point out that one of the reasons we live in a representative - and not, say, Athenian - democracy is so that our representatives can look at the big picture, weigh a policy proposal in the context of its effect on other policies, and then come to a conclusion. The citizens of Fairbanks clearly did not do that last night.
Fairbanks voters slashed the city’s rate of property tax and simultaneously grabbed the ability to approve a sales tax, leaving the city facing an estimated $13 million budget gap just weeks before the review of next year’s budget is set to begin.
By passing propsotions 3 and 4, voters have also sent the city scrambling to find a new source of revenue big enough to cover almost half its annual budget, said city Mayor Steve Thompson.
(One question, though - doesn't state law mandate the the city levy at least a 4 mil property tax to pay for education? How can they get away with capping it at 0.5 mil? Or does the borough pay for education?)
I think there's some legitimacy to the arugment that the tax burden shouldn't be wholly on the property owners. But sales taxes are regressive and hit poorer people harder. Shifting some of the burden away from property owners (and landowners) to the whole citizenry makes some sense but this is clearly a case of going to extremes.