Bread for the World contributed;
It would raise the cost of food, utilities, and other necessities, hitting middle- and low-income households unfairly.
• Taxing food and utilities is the wrong way to fund state government. While funds for education and Medicaid are important, we should not ask those who are already struggling to pay more for them.
• UNFAIR IMPACT. Those already struggling would pay most dearly for the state’s basic obligations. Already one of the “Terrible Ten” states for REGRESSIVE TAXES, more sales tax just digs South Dakota’s tax structure deeper into the regressive ditch. It’s a knuckle sandwich to low income people, and even middle-income, making it harder to keep up with basic expenses, food and utilities being prime examples.
• IT’S NOT JUST A PENNY. For the consumer, hiking total sales tax from 6% to 7% is a 16.7% tax increase. To the state, the hike from 4% to 5% is a 25% increase. Already, sales tax exceeds a dollar once your purchases add up to $16.67. If this tax increase passes, sales tax will go over $1.00 on only $14.29. People will feel this.
• AFFORDABLE? Some people simply do not have the money for this tax increase. Outside estimates are that the poorest 20% of South Dakota households would pay an average $113 more a year. It’s $334 for the middle 20%, many of whom are struggling also, especially in this recession.
• HEALTH HAZARD. Higher tax on food and other essentials, on top of higher food and utility prices, means people with budgets already maxed out will buy less food or buy less healthy food. This has health effects and is counter-productive to efforts to shore up funds for Medicaid. Hunger among children has both health and education consequences.
• Might the initiative be harsher than needed? STATE REVENUE is up and rising. Since the initiative was drafted, more revenue is available than before. Sales tax revenue is up, including more tax from the higher prices for groceries and electric bills. The past year’s revenue came in more than expected, about $50 million extra! It was not budgeted. It is available. (Should we mention the state has millions that the majority of legislators refuse to spend?) Thus, even without this tax increase, more funds are available than previously thought. A family’s total annual tax on their groceries could buy all their food for 3 weeks Adding 1% would raise this to 3-and-a-half weeks.
• One in seven SENIORS is at risk of hunger. Where would people on fixed incomes get money for the tax? For example, the tax on a $75 electric bill would go from $4.50 to $5.25.
• Is it right to ask very LOW-WAGE WORKERS to pay higher tax? Bear in mind that South Dakota’s median hourly wage, about $14.50 per hour, is one of the very lowest in the nation. “Median” means half are paid less! Children from the bottom 40% of the socioeconomic spectrum have the most difficulty succeeding in school.
• BABY FOOD! On basic baby formula, sales tax (state+city) would go over $1.00 a can. For an allergic baby, sales tax already adds over $2 per can.
• How much would NURSING HOMES benefit? Unlike hospitals, they pay tax on all food and supplies, a significant expense in already-stretched budgets.
• CHARITIES AND CHURCHES. Energy assistance is being cut by Congress. Food Stamps could also be cut. Charities, already swamped trying to help with rising utility bills and food, warn “More tax just adds to the problem. We estimate that charities and churches would need to raise an additional $6.8 million to cover the increase in the requests for help with food and utility bills, if this tax goes up.”
• IS IT FAIR that the tax increase would apply to so many necessities and not to yachts, RV’s, personal aircraft, jet skis, and hot air balloons? These items have tax breaks already. IS IT FAIR to leave zero tax on gold and even on some of the purchases of aircraft and hot air balloons? No tax increase is proposed on these.
• WILL IT STAY PUT? Despite the initiative’s wording, future legislatures are allowed to redirect the funds.
• DOES IT END? There is no end date.
This is a permanent increase in the cost of living, whether people can afford it or not, in one of the nation’s lowest wage states. Low income is detrimental to both education and health. Please consider voting NO on Measure 15. Help prevent an unfair tax increase.