Ballot Referendum on Inventory Tax Being Considered by the Forsyth County Commissioners
--By Richard Ward on --
Inventory taxes are included in the markup of the product so that the consumer is now paying the inventory tax.
If the inventory tax is reduced or removed it is extremely unlikely that any company will pass along this decrease to the consumers by reducing the selling price of the product.
To my knowledge the County and the School System does not have a reserve of funds to make up this $3.227 million yearly shortfall in tax revenue.
If the inventory tax is reduced, the loss of tax revenue will have to be made up by increasing our taxes in some other area, likely our property taxes. The consumer would be paying the tax twice: once built into the product if the price is not reduced, and again with increased taxes in some area.
I strongly advise against any ballot referendum that would result in the reduction of business inventory tax.
Bill Evelyn
August 13, 2012 at 7:36 am
I respectfully disagree Richard Ward. Your analysis makes absolutely no sense. The issue is not whether the tax will be passed on to the consumer, it is whether the business creates more capital and wealth.
You see, it is imperative to have savings, capital, or wealth to invest in new plant and equipment to create jobs.
Plus there is no need to make up the revenue. It represents 1.3% of total government dollars. Since the county and schools are sporting a >$400 million budget, at you saying they can’t cut $4.5 million.
I advise eliminating the inventory tax.
David W. Richard
August 14, 2012 at 9:48 am
I agree with Richard Ward completely.
Can we shave $1 million off of the county’s budget? Probably. But you don’t eliminate a revenue stream without having a definite plan in place to do so. That is precisely how we have gotten into $1+ trillion deficits at the national level each year – tax cuts without spending cuts.
At the school level, it is even worse. Lord knows I’ve railed against their reckless spending for years, especially on the capital side, but this system is still growing (albeit slowly), and can’t afford a $3 million cut in operating revenues, which means they’ll just have to raise the millage rate on the rest of us.
Finally (and I’m being harsh here) there are all-too-many voters like Bill Evelyn out here who will look at “tax cut” and not think beyond those two words, never considering the ramifications of what happens next. Very few people think of “cause and effect” when sitting in a voting booth and seeing a ballot question for the first time. Case in point; the recent “Personhood” referendum question in the primary. I’ll bet 99 out of 100 people saw that and thought – abortion – never thinking about the totality of the question which (if passed by the legislature next session), will take away ALL your rights to decide your OWN life and give them up to the state.
Our elected officials are bad enough, but at least I have a chance to vote them out of office for a bad decision. As such, THEY should be making these decisions and not the average voter.
Bill Evelyn
August 15, 2012 at 8:16 pm
David Richard – you don’t seem to understand that you are paying this inventory tax in everything you purchase from companies paying this tax.
The secret is to slash it from government. Give government a haircut.
Then prices will probably come down, if not they owners will be richer and most likely invest in more inventory or perhaps expansion to create opportunities.
Hal Schneider
August 14, 2012 at 10:03 am
It is not a matter of whether the BoE CAN cut costs to accommodate this tax elimination, it is a matter of whether they WANT to. Every time the BoE is threatened with a loss of revenue (E-SPLOST) they make the same threat. If you don’t give us the money through this vehicle, then we’re going to HAVE to increase your property taxes. Even AFTER giving them E-SPLOST last time, they raised property taxes ANYWAY.
Every business and every family in this county knows how to cut costs when revenues fall short of expectations. The problem with the BoE is that they have the power, when revenues decline, to simply raise the millage rate and continue to spend, spend, spend regardless of the ability of the citizens to bear the cost. I’d love to have a business where I had a monopoly and could raise my rates without repercussions.
I say cut the inventory tax through a phased in approach and force the BoE to adjust their budget accordingly. If they raise the millage rate, then we the voters should hold them accountable!
There is no doubt that cutting the inventory tax would increase not only the number of new businesses moving to Forsyth, but improve the financial state of those already here, perhaps allowing them to add jobs or reduce their prices. All good things for the county which as pointed out above would return to the coffers of the BoE in new property taxes and increased property values.
The problem is that they cannot see beyond the end of their nose to understand the LONG-TERM impact of eliminating this tax. They are completely short-sighted and only thinking about maintaining/increasing their current spending levels!
Hal Schneider
August 14, 2012 at 10:04 am
This county government has continued to GROW over the past four years, while the rest of the economy has been shrinking. It is way past time for the county, including the school board to FIND places to make cuts! An elimination of this tax will provide a long-term significant boost to the economy of this county, ESPECIALLY if surrounding counties start eliminating it and Forsyth becomes the MOST EXPENSIVE place to do business. I said it above and I’ll say it again. Your analysis is short-sighted and far from being in the best interests of the county or its taxpayers!
Brad Wilkins
August 14, 2012 at 10:08 am
I like the Idea of cutting taxes as much as possible, where ever possible, but it is a balloon squeeze. Sure we can say cut spending. But at some point, simple trimming is not enough. Governments at all levels need to focus on priorities and only spend on the services that are legitimate functions of government. What I do not want to see is one tax cut and another tax raised.
David W. Richard
August 14, 2012 at 11:06 am
“An elimination of this tax will provide a long-term significant boost to the economy of this county”
Besides being a soap-box pronouncement, do you have any firm, unbiased analysis that would confirm your statement?
David W. Richard
August 14, 2012 at 11:08 am
Hal, you’re mixing E-SPLOST(capital funds) with operating funds. A typical mistake that many never grasp.
Randy
August 18, 2012 at 4:59 pm
Brad Wilkin’s “balloon Squeeze” is an appropriate metaphor. It is doubtful business will pass on a cost avoidance to the consumer. This loss of revenue will be absorbed by the taxpayer. How we compensate for $3.2 million is small compared to what is on the horizon. The Charter School amendment (HR1162), if passed, will create a for profit school system run by an additional state agency. How will this be financed? The state cut $1 billion from the education budget this year alone. We can also expect reductions in Federal spending. Before celebrating consider this: The FCS Food Service department has a budget of $16.2 million. The Fed contributes $5.2 million, in revenue, to Food Service operations alone, not to mention other Fed supported functions. Yes Brad, we can expect the balloon to be squeezed harder it is just a question of how much and when these costs will be forced to the local level. Personhood and state run schools? Hummm, think about it.