The proposed countywide tourism tax, on the ballot this coming week, is a bad idea. Some have argued in support of this tax, saying, "It's not a tax residents of Cherokee County would be paying, but Cherokee County would benefit from it." This is wrong, morally and economically.
We should not desire to be known as a county that robs strangers or those passing through for the purpose of cleaning up our roads, or to bring in more strangers to rob. If Cherokee County businesses want to bring in tourists, they should be willing to pay for it. To extract this cost from the tourists themselves is pure theft. And the businesses will, in part, be paying for it. Part of basic economic theory is the principle that, if the price of a good is raised, the demand for that good will fall. The amount of the decrease in that demand determines how much of the price increase is paid by customers, and how much is paid by business owner. So some - and perhaps a large portion - of this tax will fall on the business owners. A Kahn Academy article explains this effect of price increases caused by taxes on the revenue of businesses. It can be found at www.khanacademy.org/economics-finance-domain/microeconomics/elasticity-tutorial/price-elasticity-tutorial/a/elasticity-and-tax-incidence.
Rather than seeking to fund tourism advertising or trash cleanup through a tax, I recommend these activities be funded through voluntary payments by citizens and businesses. Cherokee County could institute an "adopt-a-mile" program for volunteers to accomplish this. Something similar to this, the Tahlequah Main Street "Adopt a Spot" program, has worked well for the bump-outs on Muskogee Avenue downtown. Similarly, advertising campaigns could be funded by voluntary payments by affected businesses. The Beef Checkoff program is a marketing program wherein producers pay a small fee to the Beef Board. Groups like Tour Tahlequah could develop a program for tourism businesses in our county.
Taxation is ultimately the initiation of government force to extract funds for purposes that citizens or businesses are unwilling to pay for on their own. If the hotel and motel owners were willing to pay for this, they would already have voluntarily banded together to fund this endeavor.
On Feb. 9, do your part, take a few minutes and go to the polls, and vote for a free and voluntary economy in Cherokee County.
John Yeutter is a CPA and financial planner, and an emeritus associate professor at NSU.