Inconvenient Truths and Taxes

ep_debt_jlu14For some time now, I have been writing about the economic tsunami that is building up to demolish what little El Pasoans have left in their pockets. When the ballpark was being shoved down the community’s collective throats and the Quality of Life bonds were being sold by the politicians the common theme was that El Paso’s economy was robust and the future was for the taking. As always, the politicians talked about glowing reports of economic growth and prosperity while making promises about the renaissance of El Paso. As they say, the roosters have come home to roost.

The Urban Institute, a self-styled nonpartisan think tank, published “Delinquent Debt in America” earlier this month. The Urban Institute used data from the credit bureau TransUnion to compile the data on consumer debt in their report. The report rightly points out that “consumers are a major factor in economies”. The politicians, while trying to sell you more debt for the community, always point to how the economy is strong. They wrap the debt around the notion of investing in the community.

There are many examples of indebting the community by lies. The Children’s Hospital was the debt-du jour in 2007. Promises were made by the politicians about how the hospital would pay for itself and that it wouldn’t be a burden to the taxpayers. Likewise, the latest fiasco is the ballpark. The ballpark is supposed to be paid by revenues generate by sales taxes, economic growth in downtown and the HOT taxes levied on the visitors to the city. Let others pay for the ballpark was the mantra by the politicians. Each of those revenue sources require a prospering economy.

The Children’s Hospital is currently proving that economic prosperity in El Paso is nothing more than empty promises being made by those who continue to levy taxes on the residents. Although many individuals continually point out that the economic realities are just empty promises, they are ultimately chastised for daring to expose the truth. Some are even classified by the oligarchs as “crazies”. Because to those making the empty promises the truth is just an inconvenience.

On Monday, the University Medical Center (UMC) board met, and as predicted by others and me it has decided to ask the county for permission to raise taxes. Veronica Escobar has publicly postured that taxes will not be raised, however in my opinion it is nothing more than public pontificating as part of a shell game. The likely scenario, when the dust settles, is that UMC will get a credit line paid for by the taxpayers and a wink, wink there will be tax revenues at a later date. Although it would not surprise me that after much study and pontificating Escobar and cohorts will have to raise taxes in order to keep the assets the community already has intact. It is for the children would once again be the mantra. Fortunately, for the taxpayers there are not many fees the county can levy to impose hidden taxes.

The City of El Paso, on the other hand, is facing the realities of the economy and are therefore raising taxes and fees. City imposed fees are nothing more than hidden taxes, as much as Oscar Leeser pretends they are not. Fees, as taxes, are just another inconvenient truth. Adding a dollar to the monthly fees the city charges you for picking up the trash is another tax no matter how Leeser tries to pretend it isn’t.

The Urban Institute’s report should be required reading for the politicians pontificating about economic prosperity. Consider the snapshot the report provides.

According to the report “past due debt is an indication of looming problems”. The report points out that 5.3% of the US population is carrying past due debt on average. El Paso, on the other hand, has about 9% of its population carrying past due debt on their credit file. Only McAllen, Texas, with a 10.1%, is higher than El Paso.

Even more poignant is the number of individuals in collections. The reports states “debt in collections originates from non-payment of a bill” including credit cards, utility bills and failing to pay parking tickets. El Paso has 44.4% of its population with debt in collections. Almost half of El Pasoan’s have debt in collections. According to the report, $4,660 is the average debt that is in collections for El Pasoans.

The average El Pasoan is conservative in taking on debt. Housing prices, although rising, are generally lower than in other parts of the country. Because the ability to incur debt is based on the individual’s income, it is therefore reasonable to assume that the debt in collections is not misused credit cards for luxuries but rather debt because of financial distress upon the consumer.

In “Trash Bin Economics” I shared with you the differences between El Paso and Orlando in regards to taxes. El Paso overwhelmingly over taxes and applies disproportionate fees for services other communities enjoy for much less.

Keep in mind that the numbers compiled by the report are based on individuals who have a credit file. This is important because as the report points out, individuals with credit profiles are generally representative of financially stable and educated consumers. Individuals without a credit profile are likely disadvantaged. Therefore, the numbers likely represent the middle-class of the population that is the one that sustains the tax revenues used by the governmental entities. It is the middle class that pays the majority of the taxes and fees levied by the taxing entities. They are also the ones to suffer the consequences of paying for playgrounds for the rich that the politicians regularly shove down the taxpayers’ throats. The report clearly shows that these taxpayers are under economic pressure. Since taxes are exacted upon them regardless of their economic realities, it is their quality of life that suffers while the elite party it up at the ballpark.

One thought on “Inconvenient Truths and Taxes

  1. And we lie, lie, lie on a streetcar named desire
    Oh we lie, lie, lie for that sweet bird of youth
    I could be great like Tennessee Williams
    If I could only hear something that sounds like the truth. – Elton John, “Lies”

    Don’t we wish?

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