All Tax Options are on the Table
It appears that all tax options are on the table as the clock counts down the days until the legislature returns to complete a 2020 budget that includes a comprehensive road funding proposal. Over the last several weeks, the list of suggested revenue sources has included expanding the sales tax to services, moving to a graduated income tax, creating a new small business tax that would double current rates, hiking the tax on corporations from 6 percent to 8 percent, and the Governor’s proposal to raise the gas tax by 45 cents per gallon.
Another proposal would eliminate the sales tax collected on gas and replace it with a penny-for-penny increase in the gas tax so that all tax paid at the pump would go to roads, rather than the sales tax revenue going to the general fund, schools, and local government.
Finally, as an alternative to traditional taxes as a source of revenue, a proposal to bond against teacher pension funds has been proposed to free up money for road funding.
Part of the frustration for both taxpayers and small business is that while all the talk of tax hikes centers on “road funding”, the list of diversions for the revenue raised to non-road projects continues to grow. Current spending proposals that have nothing to do with roads include expanding the Earned Income Tax Credit for the poor, increases in education funding, increases in local government funding, and using road revenue for bike paths, mass transit, and other transportation projects.
The failure of the road funding ballot Proposal 1 in 2015 can be directly attributed to the public’s perception of it as a Christmas Tree of spending projects unrelated to road funding.
NFIB small business members have made it clear that they are skeptical of many of these proposals and NFIB will continue to work in the coming months to make sure that the voice of small business is heard as the debate moves forward.
