Tribune Editorial: Utah doesn't need a tax cut

Al Hartmann | The Salt Lake Tribune Senator Howard Stephenson, left, R-Draper and Senator Jim Dabakis, D-Salt Lake at the Utah Legislture's Tax and Revenue Committee Wednesda September 21.

If there’s one thing state Republican leaders like to boast about it’s the state of Utah’s economy. We’re booming! The very best. Couldn’t be better. We’ve done it.

Then why, pray tell, would we need tax cuts? The answer is – we don’t. Our unemployment is low. We don’t need to stimulate economic growth. The number of construction cranes alone act as an indicator of the state’s economic prowess.

A legislative committee studying tax reform recently considered multiple new tax scenarios for Utahns, including lowering the income tax from its current 5 percent. There’s nothing like a looming mid-term election after a new president to scare a politician into promising tax cuts.

But cutting taxes would deplete necessary revenues for county and city municipalities. And legislation from the capital would do so without input from the cities and counties it will affect. Roads need investment, homeless residents need services and workers need affordable housing. The last thing cities and counties need right now is the state cutting off their revenue.

The largest known tax cut in the draft omnibus bill, an expanded sales tax exemption on manufacturing equipment, would cause the state’s 20 largest cities to lose 6 percent of their tax base. That’s a significant change.

While cities have started collecting more in sales tax on internet retailers like Amazon, it is still uncertain just how much cities can count on collecting.

The legislators are slow to make any decisions, wanting instead to see if federal tax reform is successful. If Congress passes a bill that affects Utahns’ negatively, Republican legislators will want to sanitize that affect. Committee chairman Sen. Howard Stephenson, R-Draper, admitted, “We may want to adjust some of the elements of our taxes so it may take care of those who may be adversely affected by the federal changes.”

The Legislature has been considering tax reform for more than a year. There are many ideas, but few solutions. It’s clear Utah needs a larger tax base. The question is how to get it without raising taxes.

What is certain is that we don’t need lower taxes. And we certainly don’t need to lower some taxes just so we can raise others. What we need is a more-educated workforce. And cleaner air. Laws incentivizing behaviors around those two policy considerations would likely do more for Utah’s economy than any adjustment in its tax scheme, up or down.