No subject evokes more controversy than taxes. Not many people enjoy paying taxes. However, most people also realize taxes are essential to governance. Justice Oliver Wendell Holmes said: “Taxes are what we pay for civilized society.”
Holmes was right. If we imagine a society without taxes, we see one without public schools, public roads, public universities, police and fire departments, national defense and zoning and environmental law enforcement intended to prevent a belching factory from setting up shop next to our house.
We will have a society where the poor cannot afford to educate their children, traffic is anarchy and rich people create their own private armies to protect themselves. Actually, this is not simply imaginary. There are nations with inadequate taxation systems that experience just these problems.
The choice is not between taxes or no taxes. Rather, it is about how taxation occurs. Is the burden of taxation fair?
That is why the Utah Legislature’s tax reform proposal is bad for the state. It simply is not fair. Here’s how:
It places a larger burden on those who cannot afford more taxes. The tax on food is a bad idea that most states have rejected. It is a regressive tax that harms the poor far more than anyone else. The proposed tax credit is a salve intended to assist the poor. However, many poor people won’t claim the tax credit. Even when they do, it will be a one-time annual credit versus a weekly cost in higher taxes at the grocery store.
It unevenly taxes services. Admittedly, taxing services is the wave of the future as people increasingly use services. However, any tax on services should not exempt those businesses with good lobbyists at the state Capitol. That is exactly what this does. While the proposal taxes veterinarians, photographers, software services and various instructional services, to name a few, it exempts legal and accounting services. If service taxes are going to be imposed, they need to be across the board.
The tax reform proposal also harms our children, and therefore our future. Legislators are proposing ending the constitutional mandate that income tax funding goes for public education. Since 1996, the Legislature has expected public education money originally intended for K-12 to be shared with higher education. This despite the fact that Utah has the lowest per capita K-12 spending of any state in the nation.
If the constitutional mandate or earmark for public education is ended, legislators will be able to take money originally designated for public education and use it elsewhere. As legislators have not been the most supportive of public education (except rhetorically), there is no doubt they will be quick to say that there simply is not enough money for addressing the shortfalls in public education. The constitutional mandate currently binds them. For the future of our children’s education, that restraint needs to stay in place.
Moreover, the tax reform proposal includes a significant decrease in the state’s income tax. Even if the constitutional mandate stays in place, public education will receive fewer funds because the amount of money in the state income tax coffers will be lower. The result will be less money for public education.
The public opposes these changes. In recent surveys, two-thirds of Utahns oppose reinstating the food tax and a majority oppose ending the constitutional mandate for public education. Yet, the Legislature plans to implement them anyway. They believe that if they can make these changes in a special session next month, people will forget by next November that their own representative voted against their wishes. They are hoping voters don’t see a pattern of arrogance towards the voters on important issues such as initiatives, public education, and the food tax.
It is time for Utahns to stop electing legislators who thwart the people’s will. The United Utah Party opposes these tax reform proposals. Next year, we will be offering the voters a set of candidates who will serve the public rather than continually overriding their will. There will be other alternatives on the ballot – alternatives that reflect the public’s will better than our current legislators.
Richard Davis is chair of the United Utah Party.