Six Reasons to Oppose Project Destiny
Brian Gongol

The supervision of Project Destiny's tax dollars is inappropriate

Project Destiny would place $25 million in spending power in the hands of an un-elected council called the "Tri-County Regional Authority". The appointive nature of the council makes it far less accountable to the taxpayers than an elected board would be.

Using sales taxes to offset property taxes forces people to pay more in income tax

Income tax law generally allows people to deduct either their property taxes or their sales taxes from their Federal income tax -- but not both. Since most homeowners pay much more in property taxes than they do in sales tax, raising sales taxes to reduce property taxes has the effect of doubly penalizing most taxpayers -- since most will have to earn about $1.25 in gross income to pay for every $1.00 in sales taxes collected.

Even for those taxpayers who would choose to itemize and deduct their sales taxes instead, the paperwork burden involved is unreasonable to impose on the individual, effectively forcing the taxpayer to tally up the sales taxes paid on every purchase for an entire year.

The proposed new spending under Project Destiny represents no compelling public interest

Benjamin Franklin wrote that "It would be thought a hard government that should tax its people one tenth part." Project Destiny proposes to raise most people's local sales taxes to 7%, on top of a high state income tax rate and a Federal income tax that consumes a huge share of national income. In fact, it's estimated that this government taxes its people one-third part already. Though the promises made by the Project Destiny campaign sound nice, new hiking trails and subsidies for cultural attractions simply do not represent a compelling public interest.

Spending on cultural attractions and "quality of life facilities" is a subsidy of some people's tastes and preferences and not those of others

While some people think that "quality of life" is represented by arts organizations, others think that "quality of life" comes from having a variety of restaurant choices. Under the logic of Project Destiny, it would be appropriate to tax one type of restaurant (for instance, Mexican restaurants) in order to subsidize a different type of restaurant (say, Norwegian ones) if that would "improve the quality of life." This is hardly a far-fetched comparison: If one taxpayer's idea of "quality of life" is a big-screen television, under Project Destiny, she would be forced to pay higher taxes on what would improve her quality of life in order to subsidize the interests of some other taxpayer who would rather pay lower ticket prices to attend a cultural attraction instead. Government shouldn't be in the business of subsidizing or regulating tastes and preferences.

Raising taxes to subsidize "quality of life" may jeopardize worthwhile spending elsewhere

A sales tax assumes that people have inelastic demand for many options -- that is, it assumes that people will buy about the same amount of stuff with or without a sales tax in place. Otherwise, what would be the point of charging the tax? A sales tax has to assume some level of inescapability to be effective. Even assuming that Project Destiny would really follow through on its promise to devote two-thirds of the new taxation to the relief of other taxes, the plan still assumes that at least a third of the money collected will be "new" revenue -- that is, higher taxes. Were the higher taxes to be devoted to something truly worthwhile and universally beneficial -- like, for instance, cancer research -- it's likely that most people would find that hard to resist. But in the case of Project Destiny, higher taxes to pay for "recreational trails, regional quality of life facilities, and scientific, arts, cultural and historical preservation organizations" would be thrown into direct competition with the taxpayers' other choices for discretionary spending -- like worthwhile contributions to the charities of their own choosing. Subsidies for theatrical performances do not justify starving other worthwhile charities of funding.

Project Destiny is taking attention away from the really important issues in state taxation

State taxes and fees have risen by 20% in just three years. Yet the State of Iowa is still spending $300 million a year beyond its means, despite laws that supposedly force the government to balance its budget. The Federal government, meanwhile, is in critical financial distress, having spent too much and promised even more. Meanwhile, municipal governments and leaders are almost unanimously of the opinion that Iowa's property-tax system is unsustainable over the long run. Every community has a certain basic demand for tax revenues to pay for infrastructure (like roads and sewers) that can't just be put on the shelf when they aren't being used. Thus, as many small towns in Iowa lose population, they have to raise tax rates to maintain their infrastructure. As tax rates rise, the town becomes less attractive to new residents, aggravating the population decline and maintaining a feeback loop that could prove crippling to many of Iowa's nearly 1,000 municipal governments. Instead of using their time and energy to campaign for a fundamental solution to Iowa's taxation problem, the Project Destiny campaign has created a long-term distraction that is pushing us in the opposite direction of a real solution.