Atlanta Voters Head to Polls Tomorrow to Vote on Sales Tax Hike
September 19, 2005
Opponents of a proposed penny-per-dollar increase in the sales tax in Cobb County say it’s unnecessary. Supporters say it’s critical to the county’s continued prosperity. On Tuesday, voters will decide whom they believe.
If approved, the 1 percentage point increase would take effect Jan. 1 and raise an estimated $825 million over its six-year life. It would generate an additional $561 million in matching state and federal transportation money, county officials estimate.
Two points from the article. First, despite what supporters may say, high taxes are not the main sources of regional economic prosperity.
Second, when federal and state governments promise to match tax spending for transportation projects at the local level, this encourages higher taxes at the local level. State and federal governments are essentially telling the local government that their portion of the cost of a transportation project is cut in half, but that they must spend the money or else they don’t get anything. This leads to increased funding in projects that a local government would be unwilling to fund otherwise. At the same time, it increases taxes on everybody.
Why not merely give the money to the local government and allow them to spend it on the priorities they see as most important, and not base funding upon the targeted specifics that federal or state governments think should be at the top of the list?
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