More about G.I.’s ridiculous $400 per family figure

by David Safier

As I've noted before, the Goldwater Institute has scaled back its estimated cost of the proposed sales tax hike to the average family from the ludicrous — $600 per year — to the merely ridiculous — $400 per year.

I've written that, for a family with a $65,000 income — the more-or-less Arizona median — to cough up $400 a year for a 1 cent sales tax hike, the family would have to spend $40,000 on sales-taxed items.

That leaves $25,000 for non-taxed items like rent/house payments, utilities, food, medical costs, services, other taxes, etc.

Sorry, nobody spends their money that way. For tax purposes, the IRS estimates we spend 20% of our income on sales taxed items in Arizona, not 60% as G.I. claims.

Readers out there whose incomes are somewhere near the Arizona average, think about your monthly expenditures. Do you spend $3,333 a month on clothing, ipods, restaurants and similar items subjected to sales tax? I know most of those items show up on my credit card bill each month, and they don't come anywhere near $3,333. Yet that's how much you have to spend to end up paying an extra $400 a year for a 1 cent sales tax hike.

Please, G.I., make my day. Tell me how you arrived at your figure of $600 $400 a year for an average family.

I'm willing to bet you took the entire revenue expected from the 1 cent tax hike, divided it by the number of residents in Arizona, then multiplied it by 4 to get your "average family."

But here's the problem. Families aren't the only ones who buy items that charge sales tax.

• Tourists account for about 10% of the sales tax dollars. (Think about it, when you travel, you stay in motels and hotels, you eat at restaurants, you buy stuff to take home. You're spending lots of taxable dollars.)
• When businesses buy equipment, furniture, etc., they pay sales taxes.
• When a building goes up, the building materials are taxed. I was even told last night that sales taxes are levied on the labor that goes into building homes and business spaces.

No doubt, I've left out other areas where sales taxes are charged but Arizona families don't foot the bill.

The bottom line is, lots of the money coming in from sales taxes doesn't come out of families' pockets. But a figure like $150 per year — 41 cents a day — which is probably closer to accurate for the average family, just doesn't have the emotional impact of "$600!!! OK, not $600. $400 for every Arizona Family!!!"

It's all about effect with the right wing ("Death Panels!!!! They're going to kill Grannie!!!!") Truth? Eh, not so much.