Tag Archives: Tax

Fearless Flyby

Not long ago, the Portland Development Commission threw a big bag of money in the air and hit Trader Joe’s in the back of the head. Now the once-sought-after national grocer has laid that bag of ill-invested coins on a vacant lot in Northeast Portland and has decided to walk away from the fuss and the negative vibe. Hopefully without a bump on the head.

It’s not as if the bag of money wasn’t big enough. As mentioned in an earlier post, the PDC wanted to roll a few million dollars in front of Trader Joe’s to tempt them with the empty corner of NE Martin Luther King Blvd. and Alberta Street – hoping the lot could be paved with specialty grocer gold. At the time, the potential tenant remained a “mystery.”  A cloak and dagger scheme at best.

The neighborhood spoke out and said they didn’t want the City to throw their money away.

And Trader Joe’s chose to live in the light, and this week said in a statement that, “if a neighborhood does not want a Trader Joe’s, we understand, and we won’t open the store in question.” They are wisely looking at the long-term effects of their investments.

You can’t give away something that no one wants. But we all love Trader Joe’s, which goes to show that you can’t even give away something everyone does want, if you’re going to throw big bags of someone else’s money around. It might bruise us all.

Now we can buy our chocolate covered pretzels.

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Mystery Portland Grocery Store

The city of Portland might sell a long-vacant parcel of land on the corner of NE Martin Luther King Blvd. and Alberta Street way below cost in order to attract a grocery store. What amounts to a $2 million subsidy is so shady and ill-advised that the proposed store has asked not to be identified until the deal has closed. It’s hard to run a successful business, but who wouldn’t reach out for some free cash? They should be embarrassed. And it’s easier to criticize the deal before we know the store involved, since no doubt that store is dear to our food-loving Portland hearts. 

The land is said to be worth $2 or $3 million dollars, and has apparently been for sale for some time but no one wants it at that price. The neighborhood is considered a risky investment with a history of racial tensions, but is often targeted for bigger and better things. The land might sell for only half a million.

The Portland Development Commission really, really wants a grocery store to go in here, so they’re willing to take a loss to make it happen. But as pointed out by the Oregonian there are plenty of other groceries stores nearby, so there is low demand for another. The development only pencils out with a large subsidy. This means the land and the potential opportunity aren’t worth very much, so semi-interested tenants are looking the other way until a big enough bag of money hits them in the back of the head.

In his book Economics In One Lesson, Henry Hazlitt outlines situations very similar to this, and warns against this kind of government intervention as never ending with a net positive outcome. This northeast Portland property is a great example to illustrate his point. The land had already been purchased with taxpayer money, so the city as a whole has entrusted their money to the City in the hope that some good will come out of it. But seeing as the money doesn’t belong to them, it doesn’t surprise me that the PDC is reckless with the investment of other people’s money. They have their minds on high ideals such as helping the public, saving a blighted neighborhood, and even bringing in a much desired tenant such as Trader Joe’s (or whomever this mystery grocery store turns out to be). They might think, “It’s what the people want – right? We’ll making it happen. It’s worth the cost.”

But really, Portland would be giving away a store. They would take taxpayer money and give it to a private company to spend on a business in a location that no one has been willing to build. Then the profits go to that business – not the taxpayers. That is $2 million dollars that could have been spent on something else. Anything else. Portlanders are exactly that much poorer as a result. If the money has to be spent on something, it could be spent on something that is actually worth $2 million dollars. If taxpayers still had the money in our pockets, having not been taxed, we would have exactly that much more money in our pocket when we shop at this mystery store. We could spend it on a bag of chocolate covered pretzels. Now we can’t and there will be fewer bags of chocolate covered pretzels sold.

This location is certainly not the neighborhood most deserving of a new grocery store, if one must be given away. So east Portland and the often discussed food desert lose out. Nearby existing grocery stores will lose some business. The people who live down the street will love it, but the entire city will take a loss on a bad investment, but especially those who live nowhere near the proposed sale. Another grocery store might have been interested at a lower sale price, but as explained by someone from Whole Foods as to why they were not interested in the food desert, “Selected sites must model profitably for us since we cannot fulfill our company’s overall mission without the profits our stores provide.”

Sure it’s just a couple dollars from me, and a couple dollars from you, and a couple dollars from everyone. But add this to the other couple dollars they’ll take for the next project. And the others. Is this really what you want to spend your money on? I doubt a new Whole Foods is about to appear here, but I’d love for a Trader Joe’s to be built at this location. It’s exactly one mile closer to my home than the one I usually visit and is bound to have better parking.

But even if the deal is good for some people as Henry Hazlitt says, we must look “not merely at the immediate but at the longer effects of any act or policy; it consists in tracing the consequences of that policy not merely for one group but for all groups.”

Who Will Build the Bike Lanes?

I recently complained about the government ruining a good thing by taxing it. Pay by the mile auto insurance could turn into pay by the mile auto taxation, if some have their way. The government will always turn a good idea for saving money into a bad idea for losing money.

As an aside in my recent complaint, I pondered the threat of bicycle lane taxes as the next logical step. Too soon I remembered I had heard something like this before! Oregon had been murmuring about a statewide tax on bicycle purchases to make up for the loss of revenue from all those bicycle commuters who ditched their cars for the fresh breezes and healthy conscience of pedal power. This line of reasoning was brought on by the perceived over-bicyclization of Portland, but in this scheme the whole state of Oregon would pay for Portland’s sin of reduced carbon emissions. That’s a dandy.

Oregon is of course one of the few states with no sales tax and Portland is one of the few cities with a bazillion happy bicycle commuters. We even have a huge bike counter on the Hawthorne Bridge to celebrate! Bikes and no sales tax are good things, why mess with it now? The City of Portland spends a lot of money on bicycle-friendly infrastructure improvements which are often perceived at the expense of automobile infrastructure improvements. (There are a number of randomly unpaved gravel roads in my Portland neighborhood, but these are bad for cars and bikes alike – but good for three year olds in rain boots!)

The Oregonian reported that, “There is little organized opposition to bicycle use in Portland … However, there is latent, but pervasive, uneasiness among some residents that expanding bicycling opportunities will come at the expense of other modes of transportation.” Well, only if the state wastes their money on it.

If Portlanders in cars don’t want to pay for bicycle lanes to contain the Portlanders who are not in cars, then surely the people driving around Salem, Bend, and Eugene don’t want to pay for Portland’s bicycle lanes either. Instead of finding a different non-interested party to pay for something they’re not interested in, Portland should hire a private company to build their bike lanes. Paint a line on the side of the road and nail up a few signs. Some people in Seattle will even do it for free, and some folks out in Memphis are paying for their bike lanes with crowdfunding. Big companies are getting involved too, such as Amazon’s two block bike lane project back up in Seattle. It will be cheaper and more efficient if the work is privately contracted and we would cut out wasteful spending on spectacles like the proposed singing bike lane, and just paint some nice straight stripes as needed.

I wonder if the singing bike lane would be funded by the ill-conceived Portland Arts Tax?

Technology is Taxing. So is Driving.

There’s a great new technology in auto insurance where drivers can pay per mile, which rewards lower mileage driving with lower insurance costs, and is surely less boring than insurance-as-usual. Using a device that plugs into the car, data is sent  out to one of these entrepreneurial insurance companies, such as Metromile, to track the actual quantity of miles driven by the insured car, rewarding your good work. In paying for only what is used, infrequent drivers can save some serious money and avoid paying what the “average” user “like” them pays. But you’re better than average, right? Sounds like a great business model – use technology to help people save money on a product they use infrequently but must pay for anyway!

We’re giving it a test drive this month to see how many miles we actually drive. We’ll compare the cost to our current traditional auto insurance and I expect to save a lot. The small device plugs into a port I didn’t even know existed, located below the steering column. I now know I’m averaging about 8 miles a day, having only driven over 20 miles on 6 separate occasions.

But hey, that’s a great idea and so the government is ready to reach between your legs and plug one of these into your car to generate tax revenue! Unsatisfied with the nation’s growing trend towards driving fewer miles (which means less gas purchased and fewer tax dollars paid), the government is looking for ways to make those who pay less – pay more.

I’d like to think most people try to consider the environment before they make choices (some think about it more than others, but it helps when more green equals more $green$). Big Government certainly thinks about the environment and tells us to play nice and drive less. But penalizing drivers who choose to drive high-mileage hybrids and electric cars (and who pay fewer or no gas taxes) with a new kind of tax that removes all the benefits by collecting taxes on a per mile basis is not going to do a lot for promoting gas efficient cars and economical use of resources. Recently the Obama administration mandated new regulations in fuel efficiency “with the goal of slashing greenhouse gas emissions and fuel consumption.” They even said that “families will save money.” Save the world and save money! Sounds nice, but we knew it was too good to be true. Start riding your bike before they tax the bike lane.

Paying for what you use is better than paying for the average of what everyone uses, if you’re going to have to fork over your first fruits anyway. So much for trying to save money. We might as well stay home and not go anywhere. Until recently we didn’t have a car, so I wouldn’t have cared. I won’t be surprised if they charge a fee, penalty, or “tax” for not participating.

Brush Your Own Teeth

The people of Portland will vote with their toothbrushes this May.

Last August the City Council voted to add fluoride to the city’s drinking water, as Portland is one of the largest cities in the country that has not yet done so. Anti-fluoride activists were up in arms, bristling at the thought. Signatures were gathered and a referendum will now be set before the people. Voting was originally scheduled for 2014, but the vote has been moved to the upcoming odd-year election when participation is low due to the absence of any national concerns on the ballot. Your individual vote couldn’t be more important.

I divide the disapproving into two groups, both frowning. Some are opposed to fluoride, the actual physical element, and others are opposed to digressing individual rights and might not care much about scientific debate as much as misplaced executive order (or city council order anyway). I identify more with the government oppression crowd, but see value in brushing my own teeth. I happen to be going to the dentist tomorrow morning.

Proponents of mass fluoridation, such as Everyone Deserves Healthy Teeth, and many dentists believe that things worth doing can only be done by the government. If we can’t be trusted to brush our own teeth, this typical progressive mindset will soon lead to a ban on personal ownership of toothbrushes themselves.

Once fluoridation is introduced, the matter of regulating the precise amount becomes a central concern. Most who think about it would agree that too much fluoride is bad beans, so the question which cannot be answered is, “How much is too much?”  The pro-fluoridation camp insists that the amounts in question and in use are miniscule, so as to be insignificant. This is probably true, but I’d rather trust my own judgement on what is best for my own body, teeth included.

Rather than force all water drinkers in the city to ingest a potentially suspect chemical, why not reach out directly to the people who really want the benefits of fluoride or need a little help? If the city is going to spend money on something (inevitably spent on everyone equally or on certain people specifically), why not help lower income folks and others for whom the benefit is intended, by providing additional preventative dental services and actual dental care? There’s some of that already going on, so why not do enough to matter? It will surely save us all money and just the teeth that need it.

I’ll leave it to others to argue about the possible negative effects of fluoride, both on the natural environment and to our individual bodies. The unknowns are small uncertainties and thus open to debate, but the matter is hardly proven science one way or another. Even if many dentists recommend mass fluoridation of the city water supply, some experts say it’s not a good idea.

While the science is perplexing to me, removing personal responsibility only increases our tax burden as we all begin to brush each other’s teeth. The tooth brushes will grow bigger and bigger. We might even start using one big brush. The Portland Toothbrush. We’ll fight over what color it is and which medicine cabinet to keep it in. There will be a bristle for each of us, and we’ll all spit into the same sink.

It’s not miracle water. You still have to brush your own teeth.

Unconstitutional Arts Tax

Worse tax ever.

A flat $35 tax is due this April from every adult living in the city of Portland. It doesn’t matter what your income is. You just have to have one. It doesn’t matter if you don’t like art (or sending children to government school). The ballot measure, which was approved by voters last November, is the worse kind of tax as there is no relative relation to your income. The rich and the poor pay the same.

After the $0.99 convenience fee to pay online (a tax on a tax?), I’m down $35.99 and have nothing to show for it except a nifty postcard reminding me to pay. If I need to split it into two payments, they charge an extra dollar for their trouble!

From what I can tell, the only exemptions are for those with income below the poverty line. But you have to prove your poverty.

Even if your income is $34 dollars, you own $35.

Opposition to this tax has nothing to do with art or music and everything to do with non-consensual government plunder sanctioned by a majority (62%!). While this opens a whole other conversation on the funding of public education by those who do not use it, why not tax the parents who currently send their students to public school? Call it tuition. If so many people have no problem paying, why not just have them pay? What if it was $350?

Most laughable, some supporters say that “supporting culture (is) an inherent element of social responsibility. That’s something we can all get behind.”

There is no responsibility in forced taxation. Responsibility requires choice and decision. Call it what it is. There is nothing to “get behind.” We’re just getting pulled under the school bus. And they call that “art.”

Happy New Year From the Fiscal Cliff

Our government has done it again. They’ve made themselves necessary and showed that we need them to save us from themselves. If the war of the week isn’t big enough or the weather isn’t quite bad enough, a fiscal cliff ought to get our attention. I would like nothing better than for Congress to have nothing to do over the holidays.

But the bipartisan beast has reared its head again, as the House followed after the Senate to sidestep the disaster they created. The Democrats naturally want to increase funding to feed their bloated bureaucracy, but the Republicans showed up to unite the team after stalling just long enough to point out a few differences of  opinion… and… things… and stuff… and ok we’ll go along with that. Eventually, most Republicans succumbed to media spin and avoided being cast as the ones who might have saved us from the bill to save us from ourselves. Libertarians would have loved the chance.

Clearly the Congress has its priorities somewhere else, evidenced by their being in session on a holiday and involved in this silly exercise to fund the government. Not only should they have figured out how to fund their budgets and agendas a long time ago, there shouldn’t be so much to figure out. This is like getting excited about making the minimum payment on a credit card just to keep it a few dollars under the maximum credit limit. Woo.

They didn’t even pass this bill on time (a day late). President Obama basically said thanks for, “paying the bills guys,” and then headed back to vacation with his family where he should have been all week anyway. I enjoyed his request to Congress for, “a little less drama, a little less brinkmanship and (to) scare folks a little less in future fiscal dealings,” but he is just passing blame that rests equally with his administration as it does with Congress.

Senator Orrin Hatch, the Utah Republican said, “”I reluctantly supported (the bill) because it sets in stone lower tax rates for roughly 99 percent of American taxpayers. With millions of Americans watching Washington with anger, frustration and anxiety that their taxes will skyrocket, this is the best course of action we can take to protect as many people as possible from massive tax hikes.”

Again, Congress is pointing out that they are necessary to save the day. Republicans are reluctant, while Democrats are happy to be of service. Same end result.

Republicans talk about cutting spending, but most will continue their part in feeding the bipartisan beast. Even if not spoken of today, Neocons have their own high spending schemes to fund, such as unconstitutional wars and foreign aid.  A compromise now, “…would avert most of the immediate pain and postpone Congress’ fiscal feud for two months…” Then they’ll do this again and there will be new villans.

Congressman Ron Paul commented that, “They’re arguing over power and… who looks good… but they’re all trying to preserve this system. Whatever they do will just be fluff and will not solve our problems… They’re like a bunch of drug addicts that just want another fix.”

So, if the Fed can just print more money (like it freely does), why do they even bother with raising taxes through an elaborate and drama induced fiscal cliff extravaganza?

Don’t Tax the Church

I saw this meme posted on Facebook recently:

Facebook Meme

Why should the churches be taxed? As a punishment to make them pay their fair share? Though the issue of churches and taxes is most commonly associated with the paying or not paying of property taxes, the popular sentiment on Facebook around this and other images I’ve seen shows an interest in punishing the church simply for being the church. It could be that those who Like this poster don’t know that churches are exempt from certain taxes, and may not know that churches are voluntary associations funded by voluntary contributions from individuals who also pay a portion of their income to the government in taxes. The latter is a non-voluntary contribution.

A common topic thrown around in the media lately is the need to raise taxes on the wealthy to pay for the ballooning scope of the federal government. The big red balloon needs more hot air, so why not target other groups that seem to have a good thing going? The cathedral in the image above certainly gives that impression, but must everything successful be taxed just for existing? The government certainly has no jurisdiction over the finances of the church, no matter which denomination or congregation. The same people who call for ever-increasing taxes might be the same that constantly complain of a lack of separation of church and state, on the grounds that they don’t want to be imposed upon by the church. Apparently imposing on the church is acceptable.

Churches vary significantly in their beliefs, liturgy and involvement in the community, but generally church members voluntarily contribute money as they wish to the local church affiliation of their choosing because that is where they want their money to go. Churches do help a lot of people outside the church, both domestically and internationally, but the church is not required to meet some sort of entitlement quota. That group of individuals can direct their money to whatever cause they choose and do so as a voluntary benefit to the community at various scales.

One condition for maintaining a tax exempt status is that the church must not forward a political agenda. Charitable organizations (religious or not) are said to provide a benefit to society and serve public purposes. If these organizations are taxed, they would not be able to provide those benefits and services due to the excessive financial burden. Government taxation itself can provide similar benefits and services, and does compete directly with charitable organizations. This can lead to churches falling behind in competition to provide services because voluntary contribution surely goes down as taxation goes up. With a tax, the government would be hitting the church on two sides.

Individuals financially support each other every day, in one way or another. And whether we choose to or not. Taxation is a transfer in the method by which benefits are provided to those in need. Whereas an individual might wish to choose to support a certain mission organization that digs wells in Africa, he may instead decide that because he had to pay a certain amount of taxes this year, that hardship gives him little choice over where his money goes as he decides instead to send the African well money to pay his rent. The tax money goes to fund whatever Congress thinks is a worthy recipient (sometimes this individual agrees with Congress, but often he does not). The result is that we do not control the fruits of our own labor and may be unable to help a group that has a special meaning to us because our money is first going to a cause we personally find inappropriate.

In addition to the right of the individual to direct his finances towards the cause of his choice, another strong reason not to tax the church is that America has a separation of church and state. We do not have an official religion (i.e. government religion). A tax on the church prohibits the free exercise of religion. You cannot have separation and taxation. There is a tension between government regulation and free speech from the pulpit, as a church leader who gives certain political opinions could cause his church to lose their tax exempt status. This can be seen by some as a violation of First Amendment rights, but if the government should stay out of the church, then the church should stay out of the government.

“Therefore render to Caesar the things that are Caesar’s, and to God the things that are God’s.” Matthew 22:21 (ESV).

Individuals should give charitably with a personal conscience rather than by forced taxation.

Portland’s Plastic Bag Ban

The Portland City Council, led by outgoing Mayor Sam Adams, recently increased its regulation on the use of plastic bags within city limits. Not everyone thinks it’s a good idea, as we’ll now have to head north to Vancouver Washington if we want to keep a plastic bag full of marijuana on our door knob (now legal!). The original plastic bag ban in Portland was established in 2011 and only targeted the largest retail stores. Now all stores, regardless of size, as well as all restaurants and farmers markets have been given notice. The full scope of the intended regulation goes into effect October 2013.

Today the Oregonian reported that state legislators are seeking to push for a statewide ban on the bag. While some cities with similar bans require a fee to use paper bags, Portland graciously allows stores to choose whether or not to implement a fee on paper bag usage. Other stores offer a discount for bringing in your own reusable bag. The proposed state-wide legislation would, “require retailers to charge 5 cents for a paper bag.” (A bag tax).

Portlanders will be using fewer plastic bags than in years past, and this is a good thing. We need to reduce our reliance on non-renewable resources, and we need to see less plastic blowing down our streets. Paper is a better alternative to plastic. We can grow more trees, but plastic bags can be difficult to recycle.

But how might we relieve ourselves of plastic bag waste without government regulation of private business practices?

Would individuals choose to the use paper or cloth bags rather than plastic, if given the choice? Many do it every day with the choice as it stands. I propose that the burden be shared between the stores and the consumers, and the government should stay out of it. Many stores offer reusable bags for sale at a reasonable price, but continue to offer plastic bags as the default option. People use them because they are available and they’re cheap.

These are individual choices that we all need to make. We should allow space in civil society for positive choices made by individuals rather than government mandates on consumer purchases. Businesses can choose to charge for bags without being forced. Shoppers can choose to bring a bag or use paper.

Commissioner Dan Saltzman believes “Portlanders will rise to the challenge.” I say, “What challenge? There is no choice!”

Encourage alternatives and educate! Why should I care what type of bag I use if it doesn’t matter because the choice was already made by the government? We’re not making decisions to meet a challenge if there is no choice. Some think their neighbors are too dumb to make the right decision themselves, and so they must be forced to fall in line. Have we tried hard enough at the friendly art of persuasion? Can we provide another incentive to stop using plastic bags besides the force of law? Some people are simply unaware and ignorant, and would make a wiser choice if they had more information. By taking away the power of choice, government is perpetuating ignorance.

At least the plastic bag ban craze is happening at the local and state level. Check out this map. The last thing we need is a federal law which regulates how I transport my six-pack of Oregon micro-brew from the corner store to my home.