It's "only" $4 a month.
That's what proponents of a tax increase in Orem are saying.
Or "only" $48 a year.
Who can't afford 48 bucks?
That's "only" about 13 cents a day.
What could possibly be wrong with that?
Actually, everything is wrong with that logic.
Maybe you saw the story about the feud that's brewing in Orem. Residents are upset the city wants to raise their property taxes to pay for a poorly named fiber optic network called UTOPIA.
The issue has sparked protests and what one resident called a certain amount of "incivility" and "negativity" in the city. People are upset. City Council meetings have been SRO. More than 5,000 Orem residents signed a petition to force a property-tax referendum in November 2013. That means the tax increase will be frozen until after the referendum. City officials are sweating bullets.
What's the big deal about a few cents a day, they wonder?
That sort of thinking is the problem — and the genius of the tax system.
Don't you see what's happening here? Taxes are raised incrementally, so nobody notices. A little this year, a little next year, a little the year after that. A little more for the county, a little more for the city, a little more for the state, a little more for the feds. Everybody's got their hands out asking for just a little, so nobody gets upset, and look where it's left us after decades of asking. In 2009, a median-income American family of two parents and three children paid 25.3 percent of its income to federal, state and local government. One-fourth of its income.
It began with a few cents. And a few more cents. And a few more cents.
Where does it end? Or does it? It's a long-running story without an ending.
"That's the argument people will make," says Royce Van Tassell of the Utah Taxpayers Association. "It's only $4 or $5 a month. They're like gas stations that charge $3.77 and 9/10s instead of $3.78. It looks smaller. It's easier to market to the public."
That's why local governments prefer to raise sales taxes instead of property taxes — they can nickel and dime citizens every time they shop and people don't even realize someone is reaching into their wallets. It's much subtler than property and income taxes.
"People don't recognize they're actually paying more in sales tax than in state and property taxes," says Van Tassell. "They don't even pay attention to it."
Government officials are like carpenters who think that everything can be fixed with a hammer; everything can be cured by gentle tax increases.
The Orem City Council has been adept at this and sly from the start in its attempt to pay for UTOPIA, according to Hans Andersen, the Orem rookie city councilman who has been unwilling to play ball with his peers. He says he was called to an early morning meeting in January, shortly after taking office, with Mayor Jim Evans and councilwoman Mary Street. To his surprise, they discussed raising property taxes — by about $9.90 a month — behind closed doors. Andersen says he later was told this was all confidential.
"I emailed them and told them this confidentiality thing doesn't apply to me," he says. "The only reason you've done this is because the city is embarrassed and doesn't want the public to know about it. Nothing in that meeting should be kept from the public."
Andersen says the City Council met again in June and voted 6-1 for an $8.08 monthly increase in property taxes, with Andersen the lone dissenter. Says Andersen, "What they didn't tell people is that the payment to UTOPIA would increase 2 percent per year, from $2.8 million this year to $4.9 million in 2040, which means they'll have to continue to raise taxes. They decided, we can't sell the whole thing, so let's give them a little to start with, then come back in a few years and get more. They knew the public couldn't swallow the whole pill."
A little at a time.
On Aug. 14, some 600 people jammed a City Council meeting on this issue, and about 200 of them were still there when it ended at 2:30 a.m. The council voted on a $4.04 a month tax increase — another marketing ploy.
"They'll have to come back for more," says Andersen. "They were just trying to make it more palatable."
What began as a $10 increase became an $8 increase and then a $4 increase.
Andersen voted against it. "I want the citizens to vote on it," he says.
Last December, even before he officially took office, Andersen sent an email and a pie to council members trying to persuade them to let citizens vote on the issue. In the end, he had to resort to something more officious to make it happen: He and friend Wayne Burr organized the referendum. Finally, people will have a say about that $4.
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