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Five new ways for the county to pick your pocket

March 19, 2009

Want fun? How about a smoke? How about a room for the night? Or maybe you just want to turn on the lights.

To the legislature, these are all opportunities for your city or county to grab more cash. The Legislative Property Tax Study Committee has proposed to allow cities and counties to impose five new taxes. From the Des Moines Register:

• ENTERTAINMENT: Tickets for entertainment events like concerts would see an additional 5 percent charge. Food and alcohol sold at entertainment events could also be taxed. If the charge were already in place in Polk County, the most expensive seats at Wednesday night’s Nickelback concert at the Iowa Events Center would have cost concert-goers an extra $3.30.
• TOBACCO: Cigarettes and other tobacco products could be taxed by city and county governments, which would be in addition to the state’s $1.36 per-pack tax.

• INCOME: Iowans could pay an income surtax of up to 5 percent to their city or county. More than 300 school districts already charge such a tax, with a rate up to 20 percent. Essentially, it’s a tax on the amount of state tax a resident pays. For example, if a family pays $5,000 in state taxes, a 5 percent surcharge would cost the family an extra $250 a year.

• FRANCHISE FEES: Cities could legally charge up to 5 percent in franchise fees without regard to the city’s costs for inspecting, supervising or regulating a utility. If approved, the law would help Des Moines end a long-time legal battle over the city’s 5 percent franchise fee on gas and electricity. For a natural gas bill of $150, for example, a customer would pay $7.50 cents a month or $90 a year.

• HOTELS: Cities and counties could charge an additional 6 percent in taxes on hotels and motels. Currently, counties can charge up to 7 percent in special hotel/motel taxes. The extra charge would mean an extra $9 a night for a $150 hotel room.

So: we want to attract young people to Iowa. Let's make concerts and sporting events cost more! We want convention business; lets make it more expensive to stay here! We want to attract businesses? Lets raise their income taxes! It's strange how this comes from a "Property Tax" committee, but there's nothing here about reforming property taxes.

Of course, all of these taxes would be on top of the statewide 6% sales tax (7% in some places). Sure it's painful, but how else can we finance our municipal sports bars?

Link: SSB 1308

Tags: Iowa tax policy.