Everyone's familiar with the small-town Southern sheriff setting a speed trap to snare unsuspecting travelers just passing through. These speed traps have always been more about raising money than about cracking down on dangerous
driving, and numerous towns have come to depend on picking out-of-towners' pockets for revenue.
Recently the city fathers in another Southern hamlet have tried to apply that principle on a grander scale. Memphis's civic leaders are proposing just this sort of scheme in order to build a new basketball arena to woo the foundering Vancouver Grizzlies NBA franchise. And like every pissant Roscoe P. Coltrane to ever point a radar gun, they're going after out-of-towners in their cars. The irony, though, is that in trying to put the touch on visitors, they're going to end up fleecing their own.
A coven of business leaders and state and local politicians has cooked up a complicated financing package to provide the $250 million needed to build a shiny new basketball arena for the Grizzlies. The NBA and Grizzlies owner Michael Heisley won't give Memphis the time of day unless it builds them a new home. And the costs largely will be borne by -- who else? -- the taxpayers.
Funding is supposed to come from quite a few sources, but in just about every case taxpayers will be holding the bag. The City of Memphis and Shelby County will each pony up $12 million in tax money, while the state of Tennessee provides $40 million. A tourism development zone tax rebate should bring $35 million. A sales tax rebate will account for $70 million. A $1 per seat arena surcharge is expected to provide $16 million. Ten million dollars would come from the hotel/motel tax already in place.
A particularly odious part of this stinker of a plan is the proposed tax on rental cars in Shelby County. Proponents claim the 2 percent levy on car rentals would bring in $25 million. Two percent doesn't sound too bad. But what boosters rarely acknowledge is that this 2 percent would be added on top of the already excessive extra taxes on car rentals (11.25 percent in Shelby County; 20.75 percent if rented at the airport).
Worse, this tax wouldn't even work the way it's intended. The plan is to bilk tourists and businesspeople renting cars on visits to Memphis. The problem is that more than half of all cars rented in Memphis are rented by locals, often in need of a replacement vehicle while theirs is being fixed.
Original Source: http://www.manhattan-institute.org/pdf/schulz-2001-07-07_ASO.pdf