In the last few years, the Utah Legislature has increased taxes for internet sales, 911 services, telephones, transit and gasoline. Property tax increases have been significant. Some families have seen their taxes increase almost $1,000 this year.
Despite promises that taxes are going to be cut, they usually end up increasing. The best (or worst) case was the 2017 so-called federal tax cut. The Utah Legislature had to try several times to adjust the Utah tax rates to give Utah families the promised tax cut which originally increased their state taxes. The larger the family, the more taxes they would pay even with the federal tax cut.
The proposed tax increases on services would also hurt larger families. At the same time, the Legislature is considering a big tax cut for oil and gas development and production.
Making taxes more complicated seems to be the opposite of what Utah legislators have claimed. The Utah Tax Commission will have to significantly increase their bureaucracy to develop systems for collecting on services. Utah implemented a flat income tax to make it simple, but is now proposing a more complicated system using tax credits to decrease taxes for families. That is a little like companies offering rebates with the expectation that few people actually turn in the forms.
Utah added a strong internet tax law recently that was claimed to produce a $200 million increase in taxes. The state said that they would decrease other taxes to ensure that the government would not actually increase revenue. It does not make sense to increase (collection of) internet sales taxes and say that Utah will reduce taxes in return (so that Utah doesn’t increase spending), then propose raising taxes on services because we don’t get enough sales taxes.
Taxes should help infrastructure that is impacted by sales and delivery of goods. But how do services like a haircut impact our infrastructure?Taxing oil and gas production makes sense, as it impacts our infrastructure. Why is Utah taxing internet streaming when the impact on our infrastructure is nonexistent?
The Utah Legislature is proposing a gasoline tax increase, as the previous gasoline increases (“fine tuning”) in the last few years weren’t enough. Utahns voted against a 10 cents a gallon gas tax increase even though it was “promised” to go to education. But a gas tax increase would unfairly negatively impact rural communities, residents and businesses. Rural citizens need to rely on personal vehicles and gasoline more than more concentrated areas that provide mass transit options.
Utah education advocates that were pushing for more education funding seem to be silent during the present debate to cut the income tax (used to fund education) to 4.58%. As has been proved many times, tax cuts have less effect on innovation than education funding. Our rising generation, our children, are our greatest resource and deserve the best effective education possible. Utah’s income flat tax rate should go back to 5% and stay simple without a lot of complicated tax credits.
The Salt Lake County Council should have the option to increase their gasoline taxes up to 20 cents a gallon in return for building three new east-west freeways. Government should not be increasing taxes without being specific on how the tax increase will be spent.
Instead of increasing taxes on services and making government bigger and taxes more complicated, Utah should focus on increasing education funding, providing counties the option of increasing gasoline taxes for new freeway infrastructure and specify how to spend revenue to do Utah government’s job and not expand government.
Comments can and should be submitted at strongerfutures.utah.gov. There will be a public meeting on the issue at 5 p.m. Nov. 21, at the Utah State Capitol.
George Chapman is a former candidate for mayor of Salt Lake City and writes a blog at georgechapman.net.