Tuesday, February 16, 2010

Two economic justice issues in the South Dakota Legislature

They are in session in Pierre (remember, pronounced "pier," like the short thing on which you want me to take a long walk). Two items that struck me:

Senate Bill 173 restricts (most certainly does not eliminate) some of SD's usury. It caps the annual percentage rate on short term "payday" loans to 72%. Yes, seventy two percent. They presently fetch an APR in the several hundreds percent. Payday alright - if you are the lender. Today the Commerce Committee appears to have deferred consideration of this bill - I have a call in to its sponsor, Senator Jerstad, to find out more.

As I've blogged before, the Bible takes a very dim view of enslaving a neighbor to high interest rates. God puts the onus on the lender, not the borrower, when interest rates spiral out of control.

House Bill 1255 would repeal the sales tax on most food and slightly raise the sales tax on other goods and services to offset the lost state revenue. South Dakota has no income tax, but charges sales tax on food. There has been great concern that this places a burdensome cost on the poor and the working poor - this bill would relieve that while making a fractional increase in the tax on other purchases to maintain the State's budget assumptions. Scheduled for hearing before the House Taxation Committee on Thursday. Representative Feinstein is the main sponsor.

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