Lee Holloway’s Financial Chops On Display

Charlie Sykes has it:

Milwaukee County Board Chairman Lee Holloway issued the following analysis after the County Executive vetoed an advisory referendum on taxes and claimed a small increase in the sales tax (and decrease in the property tax) would create a tax island in Milwaukee County. The County Executive chose a Greenfield camera store to make the announcement.

At today’s gas prices, a 1-cent increase in the sales tax would not create a tax island. For a camera costing $500, the sales tax in Milwaukee County would rise by $5. But, factoring in our current gasoline prices, it would be slightly more costly for many Milwaukee County residents to drive to the nearest camera stores in Waukesha County .

Yes, it is possible to construct a scenario where the gas prices offset a tax increase to make it less likely that someone would leave the county to make a purchase.  Also note that Holloway used mileage calculations from downtown.  If a person lives nearer to the edges of the county, the fuel cost could be almost negligible.  But let me share some other scenarios where the tax will hurt Milwaukee County:

- For people who have a major purchase to make, like appliances, a vehicle, furniture, major electronics, etc., the sales tax increase would more than justify a trip to Brookfield Square.

- People who either work or travel frequently to other counties for other reasons can easily stop outside of the county for a purchase since they are already there.

- People who want to open a retail business and can open it in the county or right outside of the county are more likely to open it outside of the county.

I could go on, but it goes without saying that being a tax island is not a good thing. 

Furthermore, I have more respect for those who argue for the tax increase on principle rather than trying to pretend that it won’t cost people any more money.

All of that being said, I say GO FOR IT, Milwaukee!  My county could use the economic boost.