Commentary: Legal gambling would be better than Utah’s tax ‘modernization’

(Rick Bowmer | AP file photo) In this Sept. 12, 2018, file photo, Utah Gov. Gary Herbert speaks during a news conference at the Utah state Capitol in Salt Lake City. Herbert wants to add new sales taxes on services while cutting the overall rate to the tune of $200 million, part of a reform effort he says will be a "heavy lift" but is essential for the state's economic future. Herbert outlined the idea Thursday, Dec. 6, 2018, while introducing his plan for the state's $19 billion budget.

Utah’s governing and business elites are doing their best to convince Utahns that the state’s tax system must be modernized. However, their solutions are to do more of the same rather than doing something really innovative, such as implementing a lottery and online sports betting.

For example, the Salt Lake Chamber — dubbed an “Enemy of the Taxpayer” by Americans for Tax Reform — is the driving force behind imposing a sales tax on services, as that option allows their big business members to further socialize their costs while privatizing their profits by shifting the tax burden onto low and middle-income Utahns and small businesses.

A lobbyist for the Utah Realtors is pushing a new statewide property tax. Apparently, the Realtors are willing to do anything to avoid a sales tax on their agents’ services and real estate transactions — except cut government spending that is.

Certain legislators want to amend the state Constitution so the income tax, which is currently dedicated 100% to public education, can be used for other purposes as well. Of course, this is a non-starter since the powerful education lobby will never let it happen.

Still other legislators argue that the solution is to require the federal government to turn over federal lands to the state, or to at least pay property taxes on the land at fair market value. That isn’t going to happen anytime soon.

Of course, no one talks about reducing spending, despite the fact that during the past 20 years, the Utah state budget, exclusive of federal funds, has increased by a whopping 146% while the median household income of Utahns has only increased by 55%.

So if everyone is determined to find a way to ensure that the state budget continues to grow faster than median household income, how about implementing a lottery and online sports betting?

After all, Utahns already support gambling, whether it be by participating in home poker games, driving to Idaho and Wyoming to buy lottery tickets, participating in office pools, playing Bingo, taking the senior citizen bus to Wendover or engaging in online games of chance.

The lottery and online sports betting have a lot going for them. They can provide the state with a new source of revenue. They can create new jobs and help grow the economy without taxpayer subsidies. They can make Utah more hospitable to tourists and improve Utah’s overall national image. They do not require small business owners and others to become tax collectors for the state, as a sales tax on services would.

But, perhaps best of all, unlike a new property tax, the lottery and sports betting would not force Utahns to share ownership of their homes and other property with the state.

In Idaho, lottery dividends have provided $846 million for public schools and the state’s permanent building fund. In addition, eight states have adopted online sports betting in order to tap into a $300 billion to $400 billion business, and 31 states are actively considering adopting it.

Ah, you say, but won’t all of those low and middle-income folks just squander all of their money on the lottery or on online sports betting? Of course not! And they certainly don’t need a condescending state government to protect them from their own choices while forcibly taking their money through a new sales tax on services or a new property tax.

At least, when Utahns play the lottery or bet on sports, they do it of their free will and for their personal pleasure, not because the state is forcing them to do it.

Ron Mortensen

Ronald Mortensen, Ph.D., Bountiful, is a co-founder of CitizensForTaxFairness.org.