State Representative Joe Faust sponsored the bill. I feel like I may have to pull a Biff Tannen on this guy. “Hello? Hello? Anybody home? Huh? Think, Faust. Think!” This bill has flaws at many levels. Right off the bat, it is an attack on the level playing field principle that ELFA so tirelessly promotes. Furthermore, it not only unfairly targets a specific industry (leasing!), it also has the potential to do harm to several other sectors of the local economy. For certain leasing customers, a residual-based lease payment is the only way they can afford to acquire equipment. For others, the matching of use, costs, and revenues provided by lease financing is a perfect fit with their business model. The costs of equipment acquisition just went up for these customers, but not for those who can pay cash or have larger lending facilities. I am not the only one questioning this action. Donna Watts, president and chief executive officer of the South Baldwin Chamber of Commerce, apparently is concerned about the potential negative impact on industrial development projects, since developers spend millions of dollars leasing equipment. This excess cost then will be passed on as an increase to the cost of the projects.
But you know, I am alright with that. The county does need to raise revenue so that it is a nice place for people to work, live, and play. What I am questioning is why does that responsibility have to be put on the back of the leasing industry? As Ms. Watts went on to say "My thoughts were that no one group needs to be asked to bear all of the burden, that you have to find small amounts in multiple places so it is not extremely painful to any one group of people." I agree. Spread the tax across the board. Why not an additional levy to the sales or property taxes? If leasing represents a third of capital expenditures, then all you have to do is apply a 1.33% additional sales tax on equipment sales. Done! There is your 4% and no one is unfairly burdened. Makes sense to me.
Comment Preview