Sunday, February 20, 2011

Tax increase vs. shop locally owned

            I hope you find this reading compelling because I need help getting the word out. In previous articles I’ve discussed the “Think Local” concept of shopping. I’d like to go a little deeper into an area I feel is the real reason I feel so strongly about compelling others to think local.
            We’ve all heard that product pricing is driven by supply and demand. Our local public services are no different. There is a demand placed on public services by our community, and in turn a supply of money is required to meet that demand. The supply of money comes to the public services in the form of taxes paid by the community. Want more services? Pay more taxes. I’m not going to go into the efficiency or any other topics on the demand side. Pick up any paper or browse a news website and you can get all the information and opinions you crave. I would like you to consider a supply side element.
            How can shopping a locally owned independent business have a significant effect on the supply side? It is two fold. First are the number of jobs brought back to the community, and each job is another tax payer. For instance, when you buy a gallon of locally grown milk you are creating a demand for services such as local processing and packaging. On top of that are the ranchers, feed supply businesses, veterinarians, fencing folks and more. In addition we have local people producing the business web pages for the dairy and other businesses previously mentioned. Accountants, lawyers, cattle auctioneers, marketing professionals, radio and television production people and more will all require increased labor to meet that demand. Just from buying locally produced, processed, packaged and delivered milk. The second and no less significant impact is the profits the dairy and all of these supporting businesses provide. Not only are a significant amount of these profits spent locally (most local business owners are very supportive of other local businesses) but they are a source of tax revenue as well.
            As you can see, any significant shift in spending toward locally owned independent business can and would without question create a significant supply side increase in tax revenue. I ask that you consider this analogy with that of shopping a non-locally owned business that sources their product from the cheapest source to compete on price alone. Is it possible that if you’re shopping on price alone you’re having a bigger impact on the community and in turn your own quality of life than you realize?
            I figure in our family we spend in the neighborhood of $16 a month more buying locally produced milk than that of the cheapest available milk. In turn we’d see a significant increase in local tax revenue, and local jobs. What would I see for a tax increase of $16 a month? Our family is asking for and seeking out locally produced products and supporting locally owned business first, and now you know one more reason why.

Tuesday, February 15, 2011