Letter: Now is time to concentrate on the positive things we can all accomplish together, not raising taxes

Dear Editor: Our Chambers of Commerce have worked diligently to support the citizens and businesses of South Lake Tahoe.

It was the Chamber that
- Pushed for the building of the Utility District to handle sewer and water to protect the Lake

- Initiated the incorporation of the City
- Started Clean Tahoe
- Gave the first contributions to start the Boys and Girls Club
- Helped write the Lake Tahoe Restoration Act
- Helped to bring the annual Presidential Summit that has since brought a billion dollars in environmental benefits to Lake Tahoe
- Helped start the Lake Tahoe Education Foundation
- Sponsored Measure S for the Ice Rink and kids' ball fields
- Pushed for affordable housing since the mid-1980s
- Helped get Highway 50 open when the mudslides happened
- Started Leadership Lake Tahoe among many other civic benefits

We make no excuses for being advocates for the 3,000 small businesses that employ most of the workers here. In that role, from time to time, we also act as advisors to the various government agencies, including the City, as to how to give the citizens the services they need without causing those same citizens harm by losing their jobs and businesses because of hurtful overreaching taxes.

A drive down Highway 50 shows all the empty buildings. This is one of those times when we must speak.

A literal avalanche of divisive new taxes has been proposed recently that would, in our opinion, cause irreparable harm to you, the citizens of this community.

One is the outlandish Vacancy Tax initiative that would charge every family that doesn't use their home year-round, an unbelievable $6,000 per year. It is counter to the Takings Clause in the U.S. Constitution, and previous Supreme Court rulings, and is not allowed by the Ellis Act of the State of California, and it is taxation without representation.

The second proposal was a possible change to a Charter City that would allow the city to take a large cut of each family's home sales price. Hopefully, that will not happen.

Some council members want to interfere with businesses by giving raises to other people’s employees by enacting a raise in the minimum wage causing higher prices, business closures, and layoffs of our locals.

Now, coming up on Tuesday, February 27 at 5:30 p.m., the Council will hear a report and possibly decide to put a Transient Occupancy Tax/TOT increase on the ballot. It is presented as a “tax someone else” gambit. It is anything but that.

Research from independent credible studies such as those linked below, shows that higher taxes on tourism hurts the very locals that are promised that they will get the benefits for free. If you read the citations in these examples, you will find more than a dozen economic studies that expose the fallacy of getting something for nothing when it comes to taxes. As we have learned over time, there is no such thing as getting something for nothing.

One recent letter to the editor stated, “Tourists vote with their feet.”

Just as we are all having to make purchasing choices in this current inflationary economy, tourists do the same. By using knee-jerk political thinking and raising our TOT to the highest in the nation, we would see less tourism which means fewer hours worked, and local jobs lost.

The city issued an up to $100,000 contract to a firm to ask citizens if they would rather have someone else pay taxes. However, there is no plan to do an economic study like the ones referenced in these linked articles below, to ascertain the negative result of such an ill-advised move. Even worse is the false presentation by one council member that the city is broke when the truth is that they have a healthy 25 percent reserve and good sources of income due to the several times in recent years that we citizens have voted for more taxes.

As Council member Tamara Wallace pointed out, “Now is not the time.”

When taxes are reasonable or low, business increases due to becoming competitive price-wise. The government gains tax revenue because of the greater flow of commerce. Then, the families that own those businesses can survive or hopefully thrive.

The bottom line is that we need to be concentrating on the positive things we can all accomplish together versus being unnecessarily divided by poorly researched tax and spending schemes with no economic plan or study to give them credibility. Our Chamber as part of the coalition of organizations looks forward to common sense prevailing on all these issues. It’s always the time for that.

If you see the logic in saving our local businesses and their employees by NOT RAISING THE TOT TAX, then please come to show your support at the council meeting on Tuesday, February 27 at 5:30 p.m. at the airport. I’ll see you there.

Duane Wallace, CEO, ACE
South Tahoe Chamber of Commerce

Sources:

The Fallacy of Exportability - This brief by the Maine Public Policy Institute denounces the idea that a state can successfully and legally export taxes off the backs of local residents and onto the backs of visitors. It notes that a good percentage of these taxes will be felt by local owners and employees rather than nonresidents. Using economic modeling to assess the effects of tax rises or cuts on five APEC economies—Chile, Indonesia, Korea, Peru, and the Philippines—the study discovered that tax increases will cause visitor demand to fall and eventually will negatively impact GDP and employment. For example, according to the study, a 1 percent increase in tax leads to an average loss of USD 56.7 million to GDP and an average of 4,030 fewer jobs in the tourism sector per economy. https://heartland.org/publications-resources/publications/the-fallacy-of-tax-exportability?source=po...

The Damaging Effects of Tourism Taxes - https://heartland.org/publications/research-commentary-the-damaging-effects-of-tourism-taxes/

Sound Tax Policies Boost Tourism and Economic Growth | APEC https://www.europarl.europa.eu/cmsdata/130660/The%20Impact%20of%20Taxes%20on%20the%20Competitiveness...

Impact of Taxes on Small Business https://www.forbes.com/sites/williamdunkelberg/2021/10/06/impact-of-taxes-on-small-business/?sh=2995...