Salt Lake Tribune
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Tax cut fever: Bone for Utah families doesn't justify tax cuts
This is an archived article that was published on sltrib.com in 2006, and information in the article may be outdated. It is provided only for personal research purposes and may not be reprinted.

If you truly believe you have discovered the way to salvation, it would indeed be small of you to share it only with the rich.

But if it is actually the path to ruin, then insisting that the poor be allowed to come, too, doesn't change where you end up.

That's the problem with Gov. Jon Huntsman's $100 million proposal to extend the perceived benefits of his tax reform proposals to lower-income households through a new state version of the earned income tax credit.

Like the last round of tax cuts, the governor's 2007 tax plan rises from the unproven, and unprovable, belief that lowering tax rates, and thus tax revenue, now will stimulate the state's economy enough to lead to greater state revenues later.

The excuse for loading the last round of tax cuts onto the plates of the richest 5 percent of Utah taxpayers was that they are the movers and shakers who will move here and shake loose more tax revenue.

Bringing the working class into the mix increases its perceived fairness. The refunds likely would be recycled right back into the economy, as those on tight budgets run to the shoe store or winter coat section.

The underlying principle of the earned income tax credit - Ronald Reagan's favorite anti-poverty program - is unassailable. By making even the lowest-level wage-earner eligible for a tax refund, the credit benefits neither the indolent poor nor the idle rich. It rewards work.

But providing an average benefit of only $120 for a working-class family of four in a way that draws $100 million away from the state's long list of unfunded needs (see above editorial) is a net loss for most people.

Working families stand to lose more in diminished education, health and public safety services than they will gain in tax credits. And they will be the first to feel it when, in the next downturn, taxes have to be hiked to balance the budget.

The harm to working families would only grow if House Republicans, as threatened, were to reduce Huntsman's proposed spending levels and treble his proposed tax cut.

Tax cut fever is so strong on Utah's Capitol Hill that some reduction seems unavoidable. But Huntsman's $100 million in cuts should be the ceiling, not the floor.

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