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Taxes, reality & the free lunch crowd
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Patrick Johnston was the incumbent state senator representing San Joaquin County in 1994 when the Manteca Chamber of Commerce hosted a candidate’s forum at what was then Larimer’s Restaurant where a second hand store is now located in the 200 block of North Main Street just south of the FESM Hall.
His Republican opponent was having a field day slamming virtually every bill Johnston had ever voted for while in the California Legislature.
Then he went in for the kill reeling off every revenue measure Johnston had supported even if it was to raise a fee for a license issued to cosmetologists with the expressed purpose of the state recouping the costs of issuing said licenses.
“Pat Johnston,” his opponent said with a smirk on his face as he ended his speech, “has never met a tax he didn’t like.”
A fairly thunderous applause broke out.
Johnston was seething. The room was filled with people who had lobbied him one-on-one to help secure state funding for the widening of the 120 Bypass. Johnston did just that. Now those same people were mesmerized by the no tax pledge of his opponent.
Johnston stood up once the room quieted. As he rose he decided to chuck his stump speech and talk off the cuff.
For the next three minutes he ran through a list of things that state taxes and fees provided ranging from the highway patrol and freeway maintenance to public education and the Department of Fish Game barely pausing to breathe as he rattled off example after example. And then, with a pregnant pause, he raised his right arm and pointed to the south before continuing. “And those horrible taxes my opponent promises he won’t support are what made it possible to build and then widen the 120 Bypass that virtually everyone in this room pleaded with the state to do.”
As he sat down, you could hear a pin drop. The room was filled with the looks of people who just had cold water thrown in their faces.
Few if any of us have pleasant thoughts when the subject of taxes is brought up. They are a necessary evil as services and infrastructure cost money. There are legitimate debates about how taxes are spent, whether things such as a state arts council that doles out public arts grants is essential government, and whether tax burdens are equitable. But at the end of the day there is indeed no such thing as a free lunch. Somebody has to pay for it and it is ultimately you and I either via direct or indirect taxes and fees.
If a developer pays for it, the cost is passed on to the homebuyer who more often than not ends up paying off the fees charged to cover amenities to serve growth with interest over the course of a 30-year loan. If a trucker pays it, the cost is passed on in the price of goods that they deliver and we buy at the store or online. Every time we buy something, we might not be charged sales tax depending on the commodity but we pay an endless list of hidden taxes.
A new car, as an example, includes all sorts of taxes paid by firms that mine the raw materials, the railroad that transports the material, the factories that produce steel and such, the tax burdens of the auto manufacturers, the tax bills of auto transport firms, and the taxes incurred by the dealership. When you pay sales tax you are also paying taxes on the part of the vehicle that represents taxes that are charged from the mine to the showroom
It is why direct taxes are the most honest and efficient taxes.
Keep all of this in mind as Nov. 6 draws near. You are going to hear a lot of rhetoric about how candidates are going to provide various services and more amenities beyond what is now being offered including more police officers.
What they don’t talk about much is how they are going to pay for all of it. Sometimes they might say they’ll find a way to make developers pick up more of the tab and then in the next breath they pledge to work for affordable housing as if slapping more fees on homes will make them more affordable.
There are no easy answers or sure things beyond property, sales, parcel taxes, and fees charged for specific service such as water, sewer, and solid waste collection.
What we need are extensive public debates on what we need and want and what we are willing to pay to get it. We also need to let go of the absurd premise of demanding more and more from government and then saying we don’t want to pay more taxes or fees in order to cover the bill.
It’s little wonder we don’t have frank discussions about government spending because when an elected leader decides to be the adult in the room and talk about raising taxes to pay for it the pitch forks and torches come out.
If we want more from government then we have to be willing to pay for it.
Yes, there are better ways of doing things but can we really squeeze $150,000 out of the city budget for the salary, benefits, payroll costs, and equipping another police officer without cutting back somewhere else such as street maintenance manpower?
Things like swimming pools, updated libraries, fire stations, and new city halls cost money.
We need to have an honest discussion about what we want and what we need and come up with a realistic way of paying for it instead of just wishing, whining, or both.