By Abdul Hakim-Shabazz
IndyPoltics.OrgÂ
This may surprise some of you who have been following me for a while, but as anti-tax as I am, I believe local governments should be allowed to raise taxes as much as they want. I’ll give you a few minutes to digest that statement.
Welcome back.
Allow me to explain my logic. Â The town of Fishers, one of if not the fastest growing city in Indiana, is in the middle of a debate over whether to
Abdul Hakim-Shabazz is an attorney and the editor and publisher of IndyPoltics.Org.
raise its food and beverage tax. State lawmakers gave the town the authority to levy the tax this past legislative session. It basically would increase the tax 1 percent on items purchased in restaurants, bars and taverns. Currently, Fishers residents pay a total tax of 8 percent on food and beverages, of which 7 percent is the state sales tax and another 1 percent is the county tax. Revenue from the tax can be used for either economic development or to reduce property taxes.
I tend to view food and beverage taxes like user fees, they are completely voluntary. Unlike income taxes which you have to pay or sales taxes on any purchase (which you have to do unless you are completely self-sufficient) you choose whether to dine out or head over to a bar and have a cocktail or two.
The broader issue though is local governments have to go to the state of Indiana and basically beg for permission to levy taxes and raise the revenue they need to operate. I wish they had more autonomy to raise taxes without having to go to the legislature. They should have the power to raise taxes as much as they want, as long as it is set by a certain date in the prior fiscal year so people can plan ahead.
Now some of my lawmaker friends will freak out at this notion, saying they need to act as guardians of the taxpayers’ wallets and giving local governments that much authority would not be a good idea. I don’t think that’s as necessary as it might have been five, 10 or maybe 20 years ago.
I believe the taxpayer has the most powerful weapons in his or her arsenal to keep their local governments in check. First of all, they have the right to voice their opinions. They can show up at council meetings, call or e-mail their local officials and do everything short of storming the Bastille.  Their second option is to vote the you-know-whats out.   If they don’t like what the locals are doing they can get of their rear ends and vote them out of office. Of course the response to that is they would have to wait until the next election. Well, that’s where the second arrow in the taxpayers’ quiver comes in. If they can’t wait until the next election to vote, they can use their feet and vote right away, i.e. move.
There is nothing to stop someone who is sick and tired of the high taxes in one city or county, from packing up the family and moving a mile or two into a municipality or area that has lower/more reasonable taxes. Responsible, low-tax cities will be rewarded and high-tax, inefficient cities and towns will be punished. Think of it as Darwinism operating at the municipal level.  The strong, smart and fiscally sound will thrive. The bad will eventually wither up and die. And all those decisions will have been made at the local level.
By the way, the Fishers Town Council took a vote Monday night to postpone raising the food and beverage tax. They have until Dec. 31 to make a decision. I guess we’ll see by then if the first part of my theory can hold water.
Abdul is an attorney and the editor and publisher of IndyPoltics.Org. He is also a frequent contributor to numerous Indiana media outlets. He can be reached at abdul@indypolitics.org.
