Tax local

Tax local

“Buy Local” is a popular catchphrase used to promote hometown economies and support small businesses and entrepreneurs. The idea is that spending money locally keeps dollars circulating and multiplying within your resident geography.

Why subsidize Starbucks if there’s a local coffee shop for which your latte money is exponentially more consequential? The cost is likely comparable, so it doesn’t matter from a buyer’s perspective where the purchase is made.

But it makes all the difference in the world to a neighborhood entrepreneur, who uses those retail dollars to pay baristas, cover rent and purchase supplies. Starbucks will remain a highly profitable multibillion-dollar business whether or not you buy its coffee. Your local shop needs every penny to survive and have a chance to grow.

Thriving small and mid-sized towns usually have healthy local business landscapes. Retail chains and franchises are formulaic about everything, and loyalty to any certain locality is never part of the formula.

When more people buy local, that makes local investment more attractive, too. The cycle of circulating dollars tends to water the tree of civic pride, and it’s often reflected in the successes of community organizations and events.

For some perplexing reason, however, the whole local-focus vibe evaporates when it comes to taxation.

The list of taxes we pay as Americans is onerous, and made more so by the fact that we have so little control over the bulk of them. Tax dollars sent to Washington rarely return to localities, and if they do they’re burdened with strings tied to inefficient if not altogether wasteful programs that often produce negative unintended consequences.

Even tax revenue sent to Little Rock gets bundled up in the state bureaucracy, and redistributed in ways that seldom wind up benefiting the local economies from which they came.

The tax machine has many gears, and almost all of them turn steadily to suck dollars out of and away from local pockets. Consider how many are nearly invisible: cell phone taxes, cable and satellite TV taxes, utility taxes, water taxes, cigarette taxes, alcohol taxes, fuel taxes, automobile license taxes, hotel taxes, waste management taxes.

Few people even know what they pay across the broad spectrum of surcharged tax revenue, or what part of the government any individual tax funds. We don’t know what most of those tax rates are, or when they were last raised.

For instance, Arkansas has the second-highest wireless state-local tax rate in the nation, up from sixth in 2019, at least partly because of several wireless tax increases. Last year, Arkansas doubled its wireless 911 fee and also increased the state wireless universal service fund.

A family in Little Rock with a four-line voice plan costing $100 pays just over $31 in taxes–regardless of household income. Bumping taxes that are both excessive and regressive makes for a poor combination, but few knew and nobody protested.

Why we’re so tolerant of such blissful ignorance is anybody’s guess. But our ears seem particularly attuned to even the slightest signal of local sales or property tax increases, and a large portion of local populations is often quick to snarl in opposition.

Maybe because we don’t comprehend other taxes, we just accept them. The very fact that they’re beyond our control, and imposed with impunity upon local citizens by faraway legislatures, seems to invoke a sense of powerless surrender.

Local tax proposals, in contrast, frequently embolden a false sense of power. It’s as if the capability to reject a tax, any tax, outweighs all else: “Aha! Here’s a tax we can say no to.”

That’s even though–unlike state and federal taxes–such local taxes are totally within local control, are earmarked to benefit local community improvements and projects, and in many sales tax cases, are paid in significant measure by nonlocal residents.

Local taxes are the ones local citizens ought to want most, value most, support most.

Examples abound around the state of prosperity and population growth going hand in hand with well-managed local tax investment, and one common denominator in the formula for success seems to be the wisdom of establishing grass-roots backing early on.

Cities that survey local residents, host local meetings and achieve widespread local involvement tend to have greater success in not only passing local tax initiatives, but also planning and delivering the most perceived and demonstrated value from the resulting tax revenue.

The more people who have input, the more likely a local tax plan is to achieve critical mass at the polls. There’s also a grander sense of accomplishment gained from governing to guide local destiny.

National policy arguments artificially divide us; we can’t individually effect change at that level. On local matters and issues, disagreements will occur, but they are more practical than abstract. That makes compromise–the quintessential American way and the defining spirit in both 1776 and 1787–easier to pursue and, most importantly, attain within our individual sphere of participation.

Life is lived locally, and maybe part of the state’s billion-dollar surplus could be used to set up matching funds for local tax initiatives. Townsfolk willing to invest in themselves are a good state investment, too.


Dana D. Kelley is a freelance writer from Jonesboro.


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