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Contact: Steven Garrison 319-385-3462 Is Shifting the Tax Burden Fair?
Mt. Pleasant, IA – One possible option for lowering Iowa’s property taxes is to increase the state sales tax. Is this a fair and viable option for reducing property taxes in state or is it simply an unfair tax switch? In a November INSTITUTE BRIEF, Public Interest Institute Research Analyst Steven Garrison examines this issue. Garrison says one argument used in support of this tax switch is “fairness.” He says the question that needs to be asked is “fairness for whom?” The BRIEF compares rural and urban counties and how such a tax switch would impact those areas. Garrison concludes the proposal to shift the tax burden to sales tax would take dollars away from more populated areas and distribute those dollars to less densely populated areas. 1999 tax figures show that the five most populated counties in the state provided 1.4 billion dollars in income and sales taxes, while receiving only 482 million dollars in state school aid. The five counties with the lowest population provided 15.2 million dollars in income and sales tax, while they received 18.5 million in state school aid. Garrison concludes that if the state were to increase the state sales tax to provide more money to densely populated areas it would only create a situation where the more densely populated areas were paying even more of the tax burden. Garrison asks if it is truly fair to have so few pay so much, and so many pay so little? For additional information on this INSTITUTE BRIEF, or any other Public Interest Institute publications, you may contact PII at: (319) 385-3462 or log on to the PII web site at: www.limitedgovernment.org. ####
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