A sales tax “hike?” When you see those words, it sometimes makes you shudder. I felt like that too, until I applied math to what was being proposed.
The Council is proposing raising sales tax by 3/10 of one cent. I decided to apply that to a purchase to see how it will affect me as a consumer, and the businesses that pass it along to me when they actually implement it and collect it. Three-tenths of a cent increase translates:
*On $1, that’s 1/3 of a penny.
*On $10, that’s 3 cents.
*On $100, that’s 30 cents.
*On $1000, it’s $3.
So, I’m wondering just how far I’ll drive into Scottsdale or Mesa to save 30 cents on a $100 purchase. At $3.19 a gallon, 30 cents is worth about 1/10 of a gallon of gas, or 12.8 ounces of gas (about the equivalent amount of a can of soda!). If I travel even 10 miles roundtrip (assuming I get 30 mpg), that’s equivalent to about 1/3 of a gallon of gas, or about $1.05 to make the trip. Wow, I might save 30 cents on a $100 purchase, but it will cost me three times that much to save it!
Annually, the increase will result in the town raising over $1,000,000. It all adds up for the town, and I’m convinced the town needs it to offset costs to repair our streets.
So, I don’t think that this is an unreasonable request. It’s no hardship on businesses (they already have to charge sales tax anyway, and it certainly won’t hurt sales). We can certainly afford it, and it will fix three or more miles of streets in this town.