What Invisible, Unfair Taxes Are You Paying?

Everyone Complains About Taxes – There Are Some You Might Even Know You Are Paying

First, a word about taxes in general.

The political discourse in this country about taxes is generally a waste of words. Sure, everyone would like to pay less in taxes, but that is only half the question. The other half, what would we want to give up in return for lower taxes, is seldom addressed.

We saw this mindless approach to taxes carried out full scale in Kansas. Governor Sam Brownback came into office on a Trickle Down, Laffer Curve fantasy. Cut everyone’s taxes, especially the wealthy and corporations, and prosperity will flow. In less than two years, the state was flat broke.

Businesses were not only not coming in, some were leaving. Who wants to do business in a state with crumbling infrastructure, crippled education, and a lousy credit rating ? Eventually, even the Republican legislators realized this was a fool’s errand. They began restoring some funding and taxes. Mr. Trump rewarded Mr. Brownback by giving him a government appointment. The state is still picking up the pieces.

For me the question is always two parts. What do I want my government to provide? What am I willing to pay to have those goods, protections, and services? Decrying “waste, fraud, and abuse” is fun (and often valid), but it is not a rationale to cut taxes. By all means, let us go after the bad guys. But let’s have modern infrastructure, decent education, safe food and medicine, etc.

Now that I have stated why we should not necessarily resist taxes, let’s talk about two that may have skipped our attention. One of them, we definitely should not be paying. The other is a bit more complex, but still with pitfalls.

The first of these is the Pink Tax. This is charging women more for the same service that men receive for a lower price. Laundry and dry cleaning are often at the top of that list. The effect is wide spread, ranging from razors, to soap, hair care, and more. There could be reasons for some exceptions to common pricing, but they would be few. Often times the only difference is color of the product and packaging. It has gone on for so long, people do not see it.

The May 31, 2018 edition of Consumer Reports did an excellent job of highlighting this issue. Here is an eye-opening excerpt:

Skeptical? A 2015 report by the New York City Department of Consumer Affairs compared almost 800 products across five industries: kids’ toys, kids’ clothing, adult clothing, personal care products, and home health care products for seniors.

It found that goods aimed at females cost more than similar items aimed at males 42 % of the time, and that women pay an average of 7 % more than men for the same thing. With personal care products such as shampoo, the price gap was 13 %.

The tax can really add up: A 1994 study by the state of California estimated that the pink tax on services such as haircuts runs a woman an average of $1,350 a year, or about $2,280 in 2018 dollars.

If you are a woman, you likely already knew this. If you are a man, this may be news to you. If you are a consumer, you should be angry. This is a hidden tax that has no place in the 21st century.

The other tax is, as noted earlier, a bit more complex. This is the User Tax/Fee. A good example of this would be toll roads. There are many others, ranging from boat licenses to fees for a library card or to use a community pool.

At first glance, these make a lot of sense. Why shouldn’t those who use a service, or a facility, pay for it? To a point, I agree. But rolling all the cost of such goods or services into a targeted fee or tax strikes me as an unbalanced approach.

By way of illustration, the small community in which I now live is planning to install complete coverage Wi-Fi. Those who want to use it will pay a fee, those who do not, will not. But at this point, having reliable Wi-Fi throughout is a utility that people expect. It is infrastructure.

I don’t mind users paying a fee, but it is appropriate that the entire community invest in such a capability. It is something we want to have as a community, irrespective of whether we personally use it or not. Our community has a couple of swimming pools, a gym, business center, craft shops, and emergency services. None of those are billed individually – we all chip in because we think a community should have these things.

That strikes me as a smart, community-based approach. I believe items subject to user fees should have the same scrutiny. If the community as a whole is better off for having a service or a capacity, let’s all chip in a bit. One may not have a car, but those roads move the food we buy, bring the fire department to our homes, and so on.

Some things we use directly, some indirectly, some only in emergency. Some we may not use at all individually, but our community is better for having them, and that has value to me.

If you are paying a user fee on something now, consider reframing this as a community capacity issue.

Now if we could see Donald Trump’s taxes, we would know what sort of user taxes he might have been paying….

 Bill Clontz

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