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As I see it: Business fee not a good idea

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After voters nixed the ridiculous cell phone tax, it seemed that we had raised the consciousness of the City Council and that it would henceforth concentrate on serious Corvallis issues. Except for a few forays into foreign policy, that seems to have been the case.

But memories are short, and now we see apparently serious discussion of a "fee" on "businesses." The more "employees," the higher the "fee."

The stated intent is to fund economic development activities and to gather economic data useful in encouraging additional activity.

The details of the proposed "fee" have not been given adequate consideration. What is a "business"? Is the chimney-sweep who comes into town occasionally a business? If he doesn't employ anybody, would he be considered his own employee and subject to the "fee"? What about the neighbor kid who mows lawns? What about the girl next door who feeds our cat when we are away? What about grade school kids running a lemonade stand? What about a writer who has to file a Schedule C for federal taxes because he or she sold an article and is subject to self-employment tax?

What about churches? They are not taxed, but may not be exempt from "fees." (Is that why the proposed tax is being called a "fee?") Most churches have a few employees. What about other non-profit organizations: da Vinci Days, Fall Festival, Farmers' Market, Habitat For Humanity, South Corvallis Food Bank, Montessori School, Corvallis Community Band?

The details are bad enough. But the devil is not just in the details here. This proposal has two more fundamental problems:

First, it taxes those who are doing exactly what we want done - starting businesses, employing people. Any tax, no matter how small, and any paperwork will add one more reason not to take these actions. . . .

Secondly, it does not put the burden on those who would benefit.

Presumably economic development will benefit the general public. If this is so, then the costs of promoting it ought to be paid by that public, not just by the people who are already engaged in business activity here. The money could be gotten by raising property taxes or reallocating existing revenues. Unlike the proposed "fee," this would not add additional complexity and red tape to an already overly complicated local legal environment.

Data about local businesses could be gotten by requiring businesses (hopefully with a very narrow definition of the term) to fill out questionnaires as a condition of doing business here, and of compensating them from the city treasury (i.e., the taxpayers) for the reasonable costs of doing the mandated paperwork. (If it turns out that the data isn't worth what it will cost the city to obtain it, then don't have the questionnaires.)

The more something costs, the less people will use it. Some taxes are enacted with this fact mind: taxes on cigarettes, whiskey, etc. The proposed "fee" would increase the cost of employing people in Corvallis, and would therefore make economic activity here less attractive than it is now, thus undermining the purpose for which the money is being raised.

The City Council should shoot this "fee" down before any more time (and money) is spent thinking about it, and not force public-spirited citizens to put it on the ballot, expensively, in some future election.

Paul F. deLespinasse of Corvallis is a professor emeritus political science at Adrian College in Michigan. He can be reached at pdeles@proaxis.com.

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