MauledAgain

It’s no secret that I do not support using tax breaks to finance construction of facilities for, or operations of, professional sports franchises owned by wealthy individuals. Even though these individuals claim that they deserve tax breaks because they are doing something that is “good for the public,” their reasoning would support tax breaks for almost everyone, thus destroying government and civilization. I have explained this tax break grab game in posts such as Tax Revenues and D.C. Baseball, Putting Tax Money Where the Tax Mouth Is, Taking Tax Money Without Giving Back: Another Reality, Public Financing of Private Sports Enterprises: Good for the Private, Bad for the Public, Taking and Giving Back, If You Want a Professional Sports Team, Pay For It Yourselves; Don’t Grab Tax Dollars, Is Tax and Spend Acceptable When It’s “Tax the Poor and Spend on the Wealthy”?, Tax Breaks for Broken Promises: Not A Good Exchange, Tax Breaks for Wealthy People Who Pretend to Be Poor, Tax Breaks for Starving Team Owners, and Are Taxpayers Figuring Out the Games Played by the Starving Oligarchs?

The wealthy professional sports franchise owners defend their claim that they are doing something “good for the public” by pointing out that their stadiums and team operations will bring people to the games, thus increasing economic activity that generates tax revenue for the state or local government forking over taxpayer money to fund what the wealthy owners apparently cannot fund on their own. This reasoning is questionable when the taxpayer funding is for facilities already in existence to which people already are showing up. But in every instance, it’s nothing more than a tax break for the wealthy team owners, for which the justification would support, as I’ve previously argued, tax breaks for everyone who does something “good for the public.” Already, as I pointed out in It’s Not Just Sports Franchise Owners Grasping at Tax Breaks and Grabbing Tax Breaks, Sports Franchises, Casinos, and Now, a Water Park, wealthy owners of casinos, resorts, and water parks have followed in the footsteps of the team owners. I'm sure there are more wealthy owners joining the parade.

Now comes a report that the Chicago Bears are planning to leave Chicago and move to Arlington Heights. The Bears had entered a deal with Chicago to renovate its stadium in Chicago. The team borrowed money to be paid by the city from its collections of a hotel-room tax placed on visitors. With the pandemic and other factors reducing the number of tourists, the city of Chicago has made up the difference on the annual payments due on the debt, paying at least $52 million of taxpayer money needed for other purposes. The team’s relocation out of Chicago will reduce the number of people coming to Chicago on account of games at the stadium in Chicago, which will further reduce revenue from the hotel-room tax. Estimates are that the city faces close to $30 million of payments in the current and upcoming fiscal year.

The governor of Illinois has proposed that the Bears should “help pay off the leftover debt before the state considers any additional help for the team.” If I were the governor I’d tell the Bears, “If you need money, use your own. Use your owners’ money. Use the money you would have been paying had your federal taxes had not been cut. You are running a business, so figure out how to run it without begging for handouts of taxpayer money. Do what the small business owner or farmer is doing at the moment trying to survive. If anyone should be getting help, it’s the people growing food, cleaning houses, selling appliances, and offering other goods and services to the public that are of much greater importance. Let’s help the people who truly need help.”

I am an advocate of user fees, to the extent user fees can best suited to the product or service being provided by a government. Not every government-provided product or service can be funded by a user fee. For example, the cost of national defense cannot be reasonably allocated among a nation’s people. Yet there are government-provided products and services that can easily be funded with user fees. For example, a local government that provides trash and recycling pickup and disposal can charge a fee based on weight, volume, or a combination of both.

Reader Morris passed along a story from Michigan reporting that Michigan’s governor has signed legislation that imposes a 24 percent wholesale tax on the sale of marijuana from growers and processors to retailers. The tax surely will be passed along to retail customers. What will be done with the proceeds of this tax? It will be used to fund part of the cost of improving Michigan’s roads.

Reader Morris asked, “Is the Michigan Marijuana tax to fund the roads a better tax policy than a vehicle mileage fee?” My answer is a resounding no. As I wrote to Reader Morris, “Some marijuana users use roads, others don’t. A lot of road users don’t use marijuana. What’s next? Taxing people who buy peanut butter to fund schools?”

Anyone who can show me a rational link between the sale of marijuana and the deterioration of roads is invited to educate me. Perhaps there are government expenses that can be rationally linked to the sale, or perhaps use, of marijuana. Perhaps something involving government funding of specified health care services. But why should people who may not be using roads bear the burden of financing those roads while far greater numbers of people who do use the roads aren’t subject to the marijuana wholesale tax? And anticipating reactions, for those who think I am defending, advocating, or involved in the sale, distribution, and use of marijuana, or am working on behalf of marijuana lobbies, I am not. I am simply pointing out the disconnect between the tax and the intended use of the revenues it produces, just as I would react the same way to a tax on candy, shoes, computers, clothing, or pet supplies to fund roads.

The answer, when it comes to financing the maintenance and repair of roads, bridges, and tunnels is the mileage-based road fee, which I has been the subject of my commentaries for almost 17 years, and which also is supported by a growing number of individuals and organizations. For those interested in the mileage-based road fee, including how it works and refutations of arguments offered against it, take a look at my commentaries, including Tax Meets Technology on the Road, Mileage-Based Road Fees, Again, Mileage-Based Road Fees, Yet Again, Change, Tax, Mileage-Based Road Fees, and Secrecy, Pennsylvania State Gasoline Tax Increase: The Last Hurrah?, Making Progress with Mileage-Based Road Fees, Mileage-Based Road Fees Gain More Traction, Looking More Closely at Mileage-Based Road Fees, The Mileage-Based Road Fee Lives On, Is the Mileage-Based Road Fee So Terrible?, Defending the Mileage-Based Road Fee, Liquid Fuels Tax Increases on the Table, Searching For What Already Has Been Found, Tax Style, Highways Are Not Free, Mileage-Based Road Fees: Privatization and Privacy, Is the Mileage-Based Road Fee a Threat to Privacy?, So Who Should Pay for Roads?, Between Theory and Reality is the (Tax) Test, Mileage-Based Road Fee Inching Ahead, Rebutting Arguments Against Mileage-Based Road Fees, On the Mileage-Based Road Fee Highway: Young at (Tax) Heart?, To Test The Mileage-Based Road Fee, There Needs to Be a Test, What Sort of Tax or Fee Will Hawaii Use to Fix Its Highways?, And Now It’s California Facing the Road Funding Tax Issues, If Users Don’t Pay, Who Should?, Taking Responsibility for Funding Highways, Should Tax Increases Reflect Populist Sentiment?, When It Comes to the Mileage-Based Road Fee, Try It, You’ll Like It, Mileage-Based Road Fees: A Positive Trend?, Understanding the Mileage-Based Road Fee, Tax Opposition: A Costly Road to Follow, Progress on the Mileage-Based Road Fee Front?, Mileage-Based Road Fee Enters Illinois Gubernatorial Campaign, Is a User-Fee-Based System Incompatible With Progressive Income Taxation?. Will Private Ownership of Public Necessities Work?, Revenue Problems With A User Fee Solution Crying for Attention, Plans for Mileage-Based Road Fees Continue to Grow, Getting Technical With the Mileage-Based Road Fee, Once Again, Rebutting Arguments Against Mileage-Based Road Fees, Getting to the Mileage-Based Road Fee in Tiny Steps, Proposal for a Tyre Tax to Replace Fuel Taxes Needs to be Deflated, A Much Bigger Forward-Moving Step for the Mileage-Based Road Fee, Another Example of a Problem That the Mileage-Based Road Fee Can Solve, Some Observations on Recent Articles Addressing the Mileage-Based Road Fee, Mileage-Based Road Fee Meets Interstate Travel, If Not a Gasoline Tax, and Not a Mileage-Based Road Fee, Then What?>, Try It, You Might Like It (The Mileage-Based Road Fee, That Is) , The Mileage-Based Road Fee Is Superior to This Proposed “Commercial Activity Surcharge”, The Mileage-Based Road Fee Is Also Superior to This Proposed “Package Tax” or “Package Fee”, Why Delay A Mileage-Based Road Fee Until Existing Fuel Tax Amounts Are Posted at Fuel Pumps?, Using General Funds to Finance Transportation Infrastructure Not a Viable Solution, In Praise of the Mileage-Base Road Fee, What Appears to Be Criticism of the Mileage-Based Road Fee Isn’t, Though It Is a Criticism of How Congress Functions, Ignorance and Propaganda, A New Twist to the Mileage-Based Road Fee, The Mileage-Based Road Fee: Simpler, Fairer, and More Efficient Than the Alternatives, Some Updates on the Mileage-Based Road Fee, How to Pay for Street Reconstruction, Stop the "Stop EV Freeloading Act" Because The Mileage-Based Road Fee Is a Much Better Way to Go, Why Is Road Repair and Maintenance Funding So Difficult for Public Officials to Figure Out?, Should (Will) Implementing the Mileage-Based Road Fee Cause Privatization of Highway Infrastructure?, The Freedom Caucus Doesn’t Understand that the Mileage-Based Road Fee is “PRO-Freedom,” Not the Opposite, A Mileage-Based Road Fee by Any Other Name?, Does the Mileage-Based Road Fee Work for Local Road Maintenance?, Washington State Mileage-Based Road Fee Proposal Changes: Is It Better?, The Mileage-Based Road Fee Is Much Better Than a Federal Fuel Tax Increase, and Ride-Share Drivers and the Mileage-Based Road Fee.

Earlier today, while scrolling through my newsfeed, I saw a meme that had a photo of an elderly person, captioned “Give our seniors a tax-free life after 65!!!” The silliness of this “petition” was, to me, so readily apparent. I was tempted to reply to the post but decided to share my reaction more widely.

Why do all people 65 or older need a tax-free life? Should millionaires and billionaire who are 65 or older live tax-free? Of course not.

The meme probably was written by someone 65 or older who was struggling financially while dealing with a tax increase, or someone reacting to a friend or family member in that situation. The meme addresses the wrong concern. It’s not that the person is 65 or older. It’s that the person is struggling financially. But people 65 or older aren’t the only people struggling financially. The concern isn’t age. It’s economic status. Should a person age 58 trying to live on an income of $7,000 be treated differently than a person age 67 trying to live on an income of $7,000? No.

Putting aside the erroneous substitution of age for economic condition, the underlying question is whether anyone should live a “tax-free life.” Someone who owns nothing and has no income might, by reason of their condition, end up paying no taxes, though that is unlikely considering that a person in that situation who manages to get some cash to make a purchase will, in most instances, pay a sales tax on that purchase. But for the vast majority of individuals, a “tax-free life” is a fantasy dream. Even the oligarchs and corporations who find ways to reduce their tax burdens rarely end up paying zero taxes. They get attention for having zero federal income tax liability but are paying fuel taxes on vehicles they own, property taxes on properties they own, sales taxes on most items that they purchase, employment taxes if they have employees, and so on.

The question isn’t whether anyone is entitled to a “tax-free life” but how tax burdens should be distributed. That question involves decisions with respect to the type of tax, the rates of tax, and the scope of the tax. These are complex issues. There’s a reason Tax Policy courses aren’t simple 30-minute meetings but require, at a minimum, multiple hours each week in a semester-long or year-long course.

But one thing can be learned without sitting through a Tax Policy course. There is no rational reason that every person reaching the age of 65 should be forever thereafter free from paying taxes.