Keep Tax Day in your heart all year round

This past week saw one of our great national holidays occur. No, not the baseball opener (that was earlier), but Tax Day! Yay! I know that much like Christmas, sometimes it’s easy to forget the true meaning of the season and there is some humbuggery floating around, as well as a lot of last-minute preparation and stress. But, also like Christmas, maybe it’s a season we should keep in our hearts all year round.
My dad always said if you’re paying income taxes, at least you have income to be taxed. The implication being that you can’t pay income tax without the income part. Similarly, the most common tax we all pay throughout the rest of the year can’t happen without the first word: sales tax.
Sales tax is a pretty good concept. It is directly paid by the people involved in the transaction. Don’t want to pay sales tax, don’t buy something. Of course, here in Minnesota, we also have the benefit of not every good being taxable (some food items, clothing and print advertising, for example). Scaled large, it’s a good way for a government to generate revenue.
Scaled small, it’s an even better way for small towns to generate revenue.
When we think of sales tax, we often just think of it at the state level, but it’s key to remember smaller municipal units, such as towns and cities, can also levy sales taxes.
Towns and cities have two easy ways to generate the revenue they need to provide services: property tax and sales tax. There are other methodologies to be sure, but those two are the easiest. Sales tax is particularly nice because potentially more than just the residents of the municipality can pay it. Should your town or city see a large number of visitors for an event, that is additional revenue, which is a good reason to want to host events and generate tourism.
When sales tax is used at a local level, the revenue generated can be used for special projects that otherwise might not get funding. Sales tax can also help ease property tax burdens at times.
I’ve written before about how shopping local adds to a local tax base, and really sales tax is just the icing on the cake. A local business’s sales tax can really help strengthen a local economy, especially in a small town. In the formative years of a small business, the sales tax may be the only real contribution to the tax base the business can make (depending on profit/loss, start-up deductions and other corporate tax laws that help small businesses such as the Section 179 deduction). If a small town is to grow and thrive, it needs small businesses to provide revenue, and often those road repairs or city employee salaries can’t wait the three to five years it may take a small business to start paying a meaningful share of corporate taxes. Sales tax becomes crucial.
As we put our Tax Day decorations away for another year and start looking forward to other critical holidays, such as Flag Day (less than 60 shopping days left until Flag Day!), it’s important we remember every time we buy something at our local stores, we keep Tax Day in our hearts all year round.