Tacoma is number one!

By Morf Morford

Tacoma Daily Index

Tacoma has been number one in many areas lately.

In most of 2020 Tacoma was the hottest real estate market in the entire country.

Back in the 1990s, thanks to a few, ahem, determined workers, Tacoma was the number one point of activity for auto theft, and for a brief moment, a decade earlier or so, Tacoma had the highest homicide rate in the country.

Fortunately, Tacoma’s current number one spot is quite as dramatic as those earlier “accomplishments”.

I don’t know how intentional it was, and I was not aware of anything like a competition among cities for supremacy in this particular area, but, for better or worse, we have achieved civic primacy in at least one area.

I keep hoping that Tacoma could be number one in some area we could truly be proud of, maybe even something no other city has even attempted or perhaps considered possible.

Maybe something like a 100% high school completion rate, or the elimination of homelessness – by housing and employment of formerly homeless.

Or perhaps every eligible citizen registered to vote.

Or the highest rate of resource recycling.

Or the highest literacy rate.

Or comprehensive and affordable health care for everyone.

Or full employment.

Or the lowest rate of abandoned buildings.

Or of drug addiction.

Or of domestic violence. Or homicide.

Or maybe Tacoma could be known as a city of opportunity where every citizen of every race and religion and identity is treated with respect.

Or maybe we could be known as the city with no potholes.

But no, we take our place in the hallowed hall of dubious achievements by having the highest sales tax rate in the entire country.

Tacoma reached a sales tax rate of 10.3 percent since July 1, thanks to its one tenth of 1 percent sales tax increase to fund affordable housing projects.

That propelled Tacoma to first place when Tacoma’s sales tax grew from 10.2 percent to 10.3 percent, adding a dime to every $100 purchase, (not including groceries).

Tacoma collects a state sales tax of 6.5 percent and adds a local sales tax of 3.8 percent.

In second place, there’s a five-way tie between Chicago; Fremont, Long Beach, and Oakland, California and Seattle, which all have a combined state and local sales tax rate of 10.25 percent.

Birmingham, Alabama, also has a sales tax rate in double digits at 10 percent.

When it comes to low sales taxes, Portland, Oregon and Anchorage, Alaska, are the places to go – at least to shop. Neither one of them impose any state or local sales taxes.

As residents of Oregon know all too well, there is more to tax than sales tax.

Sales tax is one part of the larger tax system and should be understood in perspective.

Washington state may have high sales taxes (on everything but groceries), but it does not have a state income tax. Oregon has high income and property taxes, but no sales tax.

And we get something for our tax dollars, right?

As in any market, there must be some correlation between what we pay and what we get, right?

Premiere city services, maintained parks, capable, motivated and helpful law enforcement and first responders and infrastructure that is the envy of other cities near and far, and yes, not a pothole to be seen (or encountered).

We get all that from our tax dollars don’t we?

We have to believe that we do.

As Catherynne M. Valente put in her novel, In the Night Garden, “All things built with tax money are beautiful: so we must think or go mad.”

But at its base, and at their best, taxes, as Oliver Wendell Holmes put it, are what we all pay for civilization.

The question, as with every purchase or investment, is whether we get what we are paying for.

And the obvious corollary question; do the appropriate people pay?

There are two schools of thought on this subject, one is that those who use a service should pay for it. That sound reasonable on the surface – it just doesn’t always work out.

Schools, for example, should not be paid for by the students, or even exclusively by the parents of said students, but by all of us who live in the community and, it is presumed, would prefer to live in a community of educated and informed students (who, by the way, will, in most cases, earn more, support local business and pay more in property and sales taxes).

The other premise about taxes is that those who have the most should pay the most.

We in Washington state are often considered to have the most regressive tax system in the country.

In other words, we tax those with the least, the highest percentage, while those with the most assets pay the least.

Not only is this blatantly unfair, it is mathematically counterproductive.

This is reflected on a national level by the study of the areas most likely to be audited by the IRS.

No it was not the tony districts of Southern California or Connecticut, it was Humphreys County, Mississippi (https://projects.propublica.org/graphics/eitc-audit) with a median annual household income of just $26,000.

The five counties with the highest audit rates are all predominantly African American, rural counties in the Deep South. The audit rate is also high in South Texas’ largely Hispanic counties and in counties with Native American reservations, such as in South Dakota. Primarily poor, white counties, such as those in eastern Kentucky in Appalachia, also have elevated audit rates.

To no one’s surprise, the states with the lowest audit rates tend to be middle income, largely white populations like New Hampshire, Wisconsin and Minnesota. Generally, the IRS audits taxpayers with household income between $50,000 and $100,000 the least.

Those in even higher tax brackets pay less and are audited less for a simple reason; they have better lawyers and can fight back against the IRS – while poor people rarely can.

Which brings us back to Tacoma.

The constant drain of sales tax is bad for (mostly poor) customers and certainly bad for business.

With more than 10% of spending going for taxes, what exactly, or even approximately, is any one of us getting for that money?

As I implied above, I’d far rather Tacoma be number one in some category far more positive and productive than having the highest taxes in the country.

And I’d like to see those who can afford to pay more, contribute more.