by Ed Cassidy
I sent this to all of them. Opposite ends of the same predatory bird. Ed
Dear Representatives and Senators, after reading this op-ed I pondered how once again the Wyoming Legislature can try to inflict the costs of their fiscal irresponsibility on the taxpayers. Of course, that’s rhetorical as I am fully aware of how politicians of all stripes are quite willing to spend other peoples money to keep them in office. I hope there are enough decent people in the legislature to put a stop to this madness. Do as the rest of us who don’t have the power to legally steal from others do. When your expenses exceed your income you cut your expenses. The disdain the legislature has for us is palpable from keeping us disarmed in your presence with so called gun fee zones, to making finding your emails as cumersome as possible, to exempting lawyers from your service tax scheme. Seriously? You are becoming Washington D.C. writ small. Every year I dread the start of the legislative session knowing some new madness awaits. I have no hope that you will pay any attention to emails or letters and a friend once said that no one goes into politics to leave other people alone, but I ask you politely, how about for once, leaving us alone? Ed Cassidy Laramie firstname.lastname@example.org
Dear Wyoming Republicans:
As I am a fiscal conservative myself, it is disappointing to have to fight against a major new Republican-supported and very badly designed tax increase being considered in the Legislature. I ask for your help in killing House Bill 0067 as soon as possible. This bill goes against resolutions previously passed by some county Republican parties, opposing such tax increases.
This op-ed was published in the Saturday 01-19 Laramie Boomerang: https://www.laramieboomerang.com/opinion/contributed_columns/buchanan-are-republicans-about-to-wreck-wyoming-s-economy/article_6e9f0908-c348-5a1e-bf3b-08339b56292c.html . Full text below.
Are Republicans About to Wreck Wyoming’s Economy?
by Martin Buchanan Wyoming Columnist
Republicans in back rooms have a poor track record. In January 1972, four high-ranking Republicans decided it was a good idea to wiretap the Democratic National Committee, leading to the resignation of Republican President Nixon in 1973. In August 2002, Republican officials in the Bush administration issued the “torture memos” that officially sanctioned torture as a practice by the United States, violating both treaties and international law. Sometime in 2018, the Wyoming legislature’s Joint Interim Revenue Committee, most Republicans, submitted a bill to the 2019 session that would arguably wreck Wyoming’s economy, House Bill 0067, sales tax changes including adding a sales tax on personal services.
First, consider the difference between most goods and most personal services. The key difference is automation in the production of goods. The screwdriver you buy comes from a production line that makes millions of screwdrivers per year and is highly automated, making the product low cost and the additional burden of a sales tax tolerable. Personal services, whether of a hair stylist or a professional engineer, of an Uber driver or a computer programmer, require labor as their key component. A sales tax on personal services is a tax levied on self employed working people, in addition to their existing burdens of payroll taxes and federal income taxes.
Second, understand who really pays the tax, what economists call tax incidence. Tax incidence is highly variable. If Sally is the best accountant in town, her clients may be willing to pay 100% of the markup. Taylor is a great stylist, but demand for hair cuts is price-elastic; she may have to lower her price by half of the amount of the tax to keep the same amount of business, a loss for her. Some of us have long-term contracts with set prices; my customers will not pay any of the sales tax and I must pay all of it, a tax on gross rather than net that will consume an estimated 8.8% of my net business income paying the new tax.
Third, understand the huge compliance burdens. Most self employed persons who would be subject to sales tax will be required to buy a sales tax license and file monthly sales tax returns. We only file once a year with the federal government but Wyoming will require us to file 13 forms in the first year! The signficant hours spent on compliance will be lost income for many of us.
Fourth, ponder the Wyoming Constitutions’s commitments to no arbitrary power, to protection of labor, to uniformity and equality of taxation, and to uniform operation of general law. So are we all in this together? Is this a request for equal sacrifice? Just the opposite. The bill cynically and explicitly exempts politically favored groups, notably lawyers, with no economic rationale, just as a demonstration of raw and corrupt political power.
Fifth, consider double taxation and discouraging entrepreneurship. If Anne is employed by an engineering firm, they would pay the tax on their engineering services but Anne would pay no tax on her computer programming work that is part of their engineering services. However, if Anne starts her own company and sells her computer programming services to the firm, she pays tax as well and there is double taxation on that part of the overall service. Speaking for the information technology industry, if this bill is passed, we may as well cancel ENDOW and other efforts to bring more IT companies to Wyoming.
Sixth, look at the confused design of the bill. It wants to raise revenue, but harms that goal by also lowering the tax rate by half a percent. It wants to raise revenue, but exempts lawyers, who would provide two and a half times as much revenue as computer programmers and data processing combined.
Seventh, weigh the value of equal treatment versus the huge disparities in impact: zero impact on rich and exempt lawyers, no direct impact on employees, and huge negative impacts on the working self employed.
Eighth, there are other reasonable ways to raise revenue. Some of Representative Cathy Connolly (Albany County Democrat and Minority Floor Leader)’s proposals from last year have merit, including raising fuel taxes and raising the severance tax on underground coal. It is also reasonable to tax highly automated digital services, including internet service, cable TV, cell phone service, and Amazon subscriptions.
Boomerang columnist Rodger McDaniel made additional important points about the Legislature’s tax plans in his 15 January column, including their plans to remove the sales tax exemption on food (also in HB0067) and to greatly increase property taxes. I join him in calling out our legislators for planning and plotting these tax increases at the exact same time they were running for reelection while often pledging not to raise taxes.
Every dollar a worker earns comes from an hour worked. Payments for personal services are payments to labor. If the Republicans who control Wyoming’s Legislature care about working men and women and care about our state’s economy, they will not impose this burden on workers.
Letters, emails, and op-eds alone may not redirect our legislators. It is a time for action. Please contact your legislators in any and every way. If you have Internet access, go to https://www.wyoleg.gov/ , the legislature’s web site. What you need to get started is there.
Martin L. Buchanan is a writer, software developer, and U.S. Army veteran living in Laramie, WY. Email: MartinLBuchanan@gmail.com.