Don't raise the food tax
After the Utah House of Representatives fended off attempts to increase the sales tax on food in 2011, it appears the issue will be back in 2013, another non-election year. I favor eliminating sales tax on food altogether.
In 2007, Utah took a big step in that direction. Following Gov. Jon Huntsman's lead, lawmakers cut combined sales tax rates on food by roughly half, and more than half in higher-tax locations. Former Rep. Greg Curtis, then the House speaker, reportedly favored eliminating it entirely within the following two years.
Now some want to reverse course. According to proponents of this tax increase, Utah's revenues will not be sufficiently stable unless we raise sales tax on food to what it was before the cut. The goal: have a constant and predictable stream of tax revenue, regardless of economic conditions.
Sure, that makes things stable for state government. Downright convenient, in fact. But a boon for the government can be a bane to taxpayers.
To have stable sales tax revenues during economic downturns means the government takes more from taxpayers in bad times, regardless of our diminished ability to pay. We're asked to keep paying, even when we can't. Which begs this question: Just who do we as lawmakers represent, the government or taxpayers?
Maybe the reason for the food tax increase proposal is that the idea of doing away with the tax came from our former governor. Our Legislature seems intent on undoing everything he did. First the four-day work week, now this! Perhaps it's payback for Huntsman not having been as conservative in every way as legislators had hoped.
But regardless of who led the charge, since when were low taxes anything other than conservative? We Republicans generally espouse low taxes for all sorts of taxpayers: married couples, families with children, and people with charitable deductions, among others. So why not keep taxes low on food? These taxes impact poor families disproportionately. And food is not a discretionary expense.
As in the past, proposed food tax increase schemes will of course be accompanied by Rube Goldberg-like credits and fund transfer mechanisms to protect the working poor and preserve public education funding and to keep the proposals revenue neutral.
But tax credits will be of little or no help for many. Poor households without workers (mainly retirees) and with low income may not even file tax returns, or if they do, they may not claim their credit. They will simply pay the higher taxes.
Hiking sales taxes on food in the name of revenue stability won't work. It won't bring stability to a taxpayer trying to file for an income tax credit long after having struggled to pay more for groceries all year long. And it won't add any stability to the state's education budget either. The income tax credits mentioned above reduce the education fund, while increased sales tax payments on food add to the general fund. That means that an act of the Legislature will be required each year to keep public education funding intact.
So I ask: Why would we want to raise taxes, particularly on those that cannot pay? Why make a straightforward system complicated? Why involve income taxes in this mess, putting education funding at risk?
I never signed a pledge not to raise taxes, but I know enough to recognize that it is simply wrong to add complexity to our tax code and to raise the tax burden on those least able to pay.
Jim Nielson, R-Bountiful, is an architect and operates a small business. He represents District 19 in the Utah House of Representatives and serves on the House Committee on Revenue and Taxation.