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Process Suggestions 1.Create template of final report, then fill in the blanks 2.Adopt principles of economically competitive, fair taxation goals, including.

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Presentation on theme: "Process Suggestions 1.Create template of final report, then fill in the blanks 2.Adopt principles of economically competitive, fair taxation goals, including."— Presentation transcript:

1 Process Suggestions 1.Create template of final report, then fill in the blanks 2.Adopt principles of economically competitive, fair taxation goals, including econ dev incentives strategies 3.Explore breakeven of industry and people sectors, and how best to tie taxation levels to City costs 4.Explore green taxes and the role of environmental sustainability 5.Whole systems approach 6.Political strategies

2 1.Create template of final report, then fill in the blanks A. Bonding as Revenue generation: only when bonds are expected to generate net proceeds, e.g. economic renewal projects B.Ideal mix of EXISTING taxes and fees would be: C.Fair Taxation principles will address: D.Performance of CS tax system regarding these principles presently E.A revenue generation system that improves fair taxation performance will be:

3 2.Adopt principles of economically competitive, fair taxation goals, including econ dev incentives strategies League of Cities Principles: Equity (internal fairness Intergovernmental fairness Revenue adequacy Cost-effective revenue collection Behaviorial effects considered Accountability/transparency Self-directed Information provided on service quality

4 2.Adopt principles of economically competitive, fair taxation goals, including econ dev incentives strategies A.Total taxation paid, including other governments (plus and minus) and regressive, neutral or progressive effects B.User pay C.Relationship of taxes to services required/demanded - see #3 D.Economic sector fairness (e.g. military, tourism, real estate, etc.) - see #3 E.Equal taxation - I.e. same company or person situation results in same taxes (no case by case incentive deals)…or not

5 2.Adopt principles of economically competitive, fair taxation goals, including econ dev incentives strategies A.Total taxation paid, including other governments (plus and minus) and regressive, neutral or progressive effects 2003 Regressive/Progressive Study - Colorado % Paid Bottom 20%ile% Paid 80-95%ile Sales6%2.7% Property Income Fed Offset Total9.9%6.8%

6 2.Adopt principles of economically competitive, fair taxation goals, including econ dev incentives strategies 2003 Regressive/Progressive Study - Colorado Colorado trends 1989 to 2002: % of income paid in taxes Bottom 20%: +0.7% Second 20%: +0.2% Middle 20%: +0.3% Fourth 20%: -0.1% 80-95%: -0.6% 95-99%: -0.6% Top 1%: -0.9%

7 2.Adopt principles of economically competitive, fair taxation goals, including econ dev incentives strategies 2003 Regressive/Progressive Study - Non or Less Regressives (after federal deduction) % by Bottom 20% by 80-95% Delaware4.7%5.1% D.C Maine109.5 Montana South Carolina Colorado9.96.8

8 2.Adopt principles of economically competitive, fair taxation goals, including econ dev incentives strategies User pay Users out of City pay more for City services? Strategy: Normal Users cover X% of costs; indigent users cover X% of costs A version of User Pay: business taxation on revenues instead of profits….businesses demand services whether they are profitable or not. (State of WA does this)

9 2.Adopt principles of economically competitive, fair taxation goals, including econ dev incentives strategies Equal taxation - I.e. same company or person situation results in same taxes (no case by case incentive deals)…or not Approaches: (1) entitlements if expanding (2) case by case incentives (3) industry by industry incentives (4) equity investments - risk/reward (5) no special deals

10 3.Explore A.breakeven of industry and people sectors B.how best to tie taxation levels to City costs Context: National League of Cities, “Taxing Problems..” (May 2006) “We must avoid being trapped by current assumptions. No conventional ideas should go unchallenged and no heresies should go unexplored. Given the many ways the world has changed and is likely to continue to change, we may need to be open to new ways of thinking about federalism and state/local “sovereignty.”

11 Context: National League of Cities, “Taxing Problems..” (May 2006) 4 Key Trends and Challenges: 1.The system is unfair. The shift from goods to services, together with a rise of a so-called “knowledge-based economy” and other changes, has created a mismatch between economic activity and the 19-20th century revenue systems. 2.Intergovernmental partnerships are unraveling 3.Needs are changing 4.Governance itself is under fire. Residents are demanding more and improved services (while limiting taxation).

12 3.Explore A.breakeven of industry and people sectors B.how best to tie taxation levels to City costs A.1. Create basic model to estimate City costs/revenues generated by an industry, such as military installations, real estate, tourism, manufacturing, retail.

13 3.Explore A.breakeven of industry and people sectors B.how best to tie taxation levels to City costs A.2. Create basic model to estimate City costs/revenues generated by a sector of people, such as retirees, homeowners, tourists from outside the PP region, non-resident City “users” in the PP region, etc.

14 3.Explore A.breakeven of industry and people sectors, and B.how best to tie taxation levels to City costs B. The personal taxation system (is or is not) closely relating taxes paid with costs of City to serve. The business/institution taxation system (is or is not) closely relating taxes paid with costs of City to serve. A better way to match “costs to serve” with tax revenues generated would be:

15 B. A better way to match “costs to serve” with tax revenues generated would be: B.2. Job quality. Every job can be a net loser to the community (doesn’t generate revenues enough to cover community costs to serve the job holder) or net winner. Companies that create net loser jobs should be taxed more to make up for the net loss generated by their jobs.

16 B. A better way to match “costs to serve” with tax revenues generated would be: B.2. Job numbers: City services demanded by a business somewhat correlate with numbers of workers (transportation to workplace; security services for workers at their homes and business; city real estate development to serve workers, etc.).

17 Process Suggestions 4.Explore green taxes and the role of environmental sustainability Key concept: tax voluntary “bads” instead of “goods” I.e. unhealthy habits instead of income or wealth Key concept problem: if the taxes are successful at reducing/eliminating the bads, tax revenues decrease (though tax rates can increase somewhat in proportion)

18 Process Suggestions 5.Whole systems approach Look at taxation as a whole system local/state/fed Look at long-term implications as well as short-term Look at all costs of service and economic multipliers, not just direct

19 Process Suggestions 6.Political strategies Language: e.g. regressive/progressive, etc. Cost-effectiveness or value, not just levels Support aspiring citizens/businesses Juniper’s “Four Aspirant Factors” for citizens - these need to be affordable: housing, education, mobility, healthcare Support those on “fixed incomes” Economic development strategy Breakeven of sectors


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