Marohn says primary reliance on sales tax disconnects how a city collects its money from what it is spent on and causes cities to chase development without accounting for future costs and places the interests of citizens and local government at odds
HALTOM CITY, TX, August 22, 2023 /24-7PressRelease/ — Citizens of cities and towns across the United States want their leaders to choose policies and make decisions that lead to the long-term prosperity of the places where they live. Charles Marohn leads Strong Towns, a non-profit that seeks to help citizens and leaders with that mission.
For many towns and cities, sales taxes are an important source of revenue. Sales taxes are popular with cities and towns because they raise substantial amounts of revenue and few people object to paying a few cents in sales tax.
When a city is too dependent on sales taxes, when it relies primarily on them for revenue, Charles Marohn from Strong Towns argues in his recent post “No City Should Rely Primarily on a Sales Tax for Funding” that the results are detrimental.
Marohn argues the results are detrimental because there is little for city leaders to go on as far as feedback to determine what sales tax revenues should be spent upon and because cities that rely primarily on sales taxes chase commercial development and the transactions it produces without really accounting for long-term costs.
Finally, Marohn argues the sales tax dynamic puts the interests of local government at odds with the interests of the citizens by discouraging frugality and by reducing citizens to spenders and consumers that exist to produce the transactions that a government funded primarily by sales taxes needs to meet its current obligations.
“Haltom City and other cities and towns should consider the costs of relying primarily on sales taxes for funding and consider ways to become more resilient and more closely connect expenditures with feedback from citizens,” says Ron Sturgeon, Founder of Haltom United Business Alliance.
Ron Sturgeon, one of the founders of HUBA, says he continually hears how cities want only businesses that collect sales tax. “As silly as it sounds, the cities are counting on retail to repopulate their older commercial structures in their declining areas. In Kennedale, we recently saw a case where the city used the codes as a weapon to try to prevent a new business from opening. The city went as far as asking for more information on the bolts holding tire racks to the walls. It was clear that the city was trying to prevent this business from opening simply because it did not generate enough sales tax,” says Sturgeon.
Joe Palmer, Director of Communications for HUBA, is adamant that cities should not try to restrict commerce; it’s not what they are charged with doing. He says, “If a use is legal and fits in the zoning category and use matrix, it should be welcomed.” He adds, “Shame on the city if it hasn’t got those items as it wants them.” He adds that potentially objectionable businesses like junk yards and sexually oriented businesses should and will always get extra scrutiny.
“Cities should be more focused on just getting conforming businesses, instead of wishing for just sales tax paying businesses, which is a dream,” he says. Palmer says, if cities would stop trying to control commerce, they would look up in a few years and find all their declining areas were thriving, providing jobs, products and services and yes, sales tax.
About Haltom United Business Alliance
Haltom United Business Alliance (HUBA) is a group of business owners dedicated to making Haltom City the most business-friendly city in Tarrant County. HUBA recognizes the contributions of small business owners to the community and their unique role in providing jobs, goods and services, and greater choice to the people of Haltom City. HUBA believes innovative strategies are needed to create a strong business tax base to allow residential tax reductions. All Haltom City business owners are eligible to join HUBA. For more information, contact Joe Palmer at (682) 310-0591 or by email at HUBAgrp@gmail.com or visit the group’s Facebook page at Haltom United Business Alliance.
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