Taxalicious!
The city of Corvallis is considering a business tax for telecommunication companies doing business in Corvallis, theoretically recovering some of the franchise tax money lost when people stop using land lines in favor of cell phones and "leveling the field" for providers. This has caused quite the uproar, which either shows that people are reacting in typical knee-jerk fashion to the word "tax" or that they haven't bothered to read the fine print.
First of all, this tax will be on the companies doing business, not on individual cell phone users. It is not a direct tax on consumers. Yes, the cell phone companies will undoubtedly pass the fee along to cell phone users, all 4,600 of them here in town. Total cost per cell phone user: $30 per year. Wow! That $2.50 per month is sure going to break the budget for those earning enough to pay for subscription cell phone service!
That's really the rub. Cell phone service is not a necessity, though some people seem to be permanently attached to theirs. It's a luxury item, one that requires infrastructure such as cell phone towers, and is also drawing revenue from the city coffers that would otherwise be earned through traditional phone service. It's a fair tax and not worth all the moaning and groaning.
In similar tax news, Teresa Novak of the Gazette-Times recently wrote an opinion piece supporting Republican State Senator Frank Morse's call for a sales tax and reduction in income tax. Sales taxes unfairly penalize the portion of the population least able to pay. While those who earn a comfortable living are able to save a more significant portion of their income, thus avoiding a sales tax, the lower and low-middle classes must spend a larger percentage of their take-home pay, meaning that a larger percentage of their income is taxed than those earning significantly more. Some, like presidential candidate Michael Smith, suggest a sales tax refund for those earning below the poverty limit. This would force people below the poverty limit to pay throughout the year, then wait for the refund later. Do you know many people earning $14,000 annually (using Oregon's minimum wage) who can do without those few hundred dollars during the year? That can mean the difference between having a car that runs and hoping you don't need a ride to the hospital in the middle of the night.
Oregon's progressive income tax makes sense, as I believe that those who can afford to pay more should pay more, and the lack of sales tax encourages people to spend more money. That is a much bigger boost to the local economy than the sales tax would be.
First of all, this tax will be on the companies doing business, not on individual cell phone users. It is not a direct tax on consumers. Yes, the cell phone companies will undoubtedly pass the fee along to cell phone users, all 4,600 of them here in town. Total cost per cell phone user: $30 per year. Wow! That $2.50 per month is sure going to break the budget for those earning enough to pay for subscription cell phone service!
That's really the rub. Cell phone service is not a necessity, though some people seem to be permanently attached to theirs. It's a luxury item, one that requires infrastructure such as cell phone towers, and is also drawing revenue from the city coffers that would otherwise be earned through traditional phone service. It's a fair tax and not worth all the moaning and groaning.
In similar tax news, Teresa Novak of the Gazette-Times recently wrote an opinion piece supporting Republican State Senator Frank Morse's call for a sales tax and reduction in income tax. Sales taxes unfairly penalize the portion of the population least able to pay. While those who earn a comfortable living are able to save a more significant portion of their income, thus avoiding a sales tax, the lower and low-middle classes must spend a larger percentage of their take-home pay, meaning that a larger percentage of their income is taxed than those earning significantly more. Some, like presidential candidate Michael Smith, suggest a sales tax refund for those earning below the poverty limit. This would force people below the poverty limit to pay throughout the year, then wait for the refund later. Do you know many people earning $14,000 annually (using Oregon's minimum wage) who can do without those few hundred dollars during the year? That can mean the difference between having a car that runs and hoping you don't need a ride to the hospital in the middle of the night.
Oregon's progressive income tax makes sense, as I believe that those who can afford to pay more should pay more, and the lack of sales tax encourages people to spend more money. That is a much bigger boost to the local economy than the sales tax would be.
posted by Corvallist at
2:59 AM
5 Comments:
Quote: "Those that can afford to pay more, should pay more". In my opinion, everyone chooses their destiny. If you choose to make minimum wage, then why should the poeple that choose to work hard and make something for themselves, have to pay more? Our tax system is interesting, I have no children, but pay more taxes than those that have children and use the system.
By
Anonymous, at 6:28 AM
First of all, Jeff Giannina is joking when he says "If you choose to make minimum wage, then why should the people that choose to work hard and make something of themselves, have to pay more?" No one chooses minimum wage. They work just as hard, or more-so than someone who landed a higher paying job because they were in part in a more priviledged position. Are you unaware of the economic inequality problems the US has? I hope against hope that you were being sarcastic...?
Anyway,
I must disagree with the statement that a cell phone is not a necessity. Corvallis is a college town and for some of us, a cell phone is the only reliable and affordable phone we can get because we move around so much. I'm a student, and I'm an extremely poor student as some of us are, but I do need my cell phone because I can't afford a land line. Land lines are MUCH more expensive for people who have to move a lot or who have to call home long distance a lot because of long distance charges, the repeated installation fees, and the difficulty of notifying everyone we know of a phone number change.
Maybe poor students (as opposed to rich students who are being sent to school by their rich parents) are a small population, but a $2.50 increase in my monthly phone bill WOULD make a huge difference to me at least. that's almost enough to pay for my breakfast groceries each month (yay winco and 99c bread). It would hurt my budget, and those like me.
If corvallis wants to punish the cell phone companies for providing a superior and cheaper product, I don't think it should be through taxes. Perhaps it should be by improving the land-line product so that more people would choose them over a cell phone.
By
me, at 9:41 AM
A phone is a phone. The city needs money from phone taxes. I think it's fair. Cell phones are more expensive in general. Land lines are cheaper in the long run, if you don't move. Anyway, the point is, why should just land lines be taxed?
By
Christopher Farrell, at 7:00 PM
Emily,
I was a college student as well, waiting tables (2.01 + tips in texas) and paying my way through college, it wasn't easy, I had to adjust and live without some things. I am fairly certain you are in the same situation. There are plenty of good paying jobs out there. For example, look at the health sector, they need doctors and nurses bad. Aviation needs pilots and maintence staff, they are hiring like crazy. You can work hard and become 'privledged' or you can complain about how bad the economy is 'your choice'
Have a nice weekend,
Jeff :)
By
Anonymous, at 6:36 AM
Will you publish my comment? I'm Nick W. I know R.O. Here it is:
Try to take a long term view..
If the CLEC model (competitive local exchange carrier) had passed
compliance hurdles without monopoly telco interference from
Qwest/USWorst then entrepreneurs and businesses here could have started local telecommunication firms with their own local, national and international rates AND cell phone plans right now would cost on average $9-$15 a month.
Then, closer to 70% of the valley would have cell phones instead of the constant 25-35% we've seen for the last 5 to 7 years. More phones could have potentially led to more tax incurred.
You can thank ex-CEO Ralph Nacchio and Dick Cheney for the existing west coast monopoly, the latter once sat on the USWest board of directors.
By
Anonymous, at 10:08 PM
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