Harmons knows where its bread is buttered.
Owners of the Utah-based supermarket chain announced Thursday that their 19 stores will be actively hosting the signature-gathering campaign aimed at overturning the tax reform package passed last month by the Legislature and signed by Gov. Gary Herbert.
The income tax breaks the upscale chain’s owners would harvest from the complex tax bill were apparently not enough to overcome their righteous objection to the sharp increase in the sales tax rate to be charged on the groceries their customers buy.
The same bill that cuts the state’s already low and flat income tax rate from 4.95% to 4.66% will also end the discounted sales tax rate the state has, for many years, charged for unprepared food, constituting a hike in the sales tax rate on groceries from 1.75% to 4.85%.
“Food is essential and should be affordable,” Harmons Chairman Bob Harmon said in a statement. "Increasing the tax on food hurts everyone, but especially those in our community who are already struggling. As a company, we do not believe groceries should be taxed. We feel strongly that Utahns should have an opportunity to vote on the issue before the tax goes into effect.”
In response, Herbert said the grocers were entitled to their corporate citizen’s opinion. But the governor said the Harmons executives apparently didn’t understand that the overall package adds up to a cut in the total tax burden placed upon Utahns. Objections to the tax package, the governor said, should be, “based on facts and not emotion.”
But, as any good grocer knows, there is a great deal of emotion attached to food. Not just the taste and the presentation, but also the comfort it may bring and the memories it may conjure. And, sometimes, the cost.
Seeing the state not just balance its books, but brag of a tax cut, while significantly boosting the cost of the most basic commodity of life does not sit well with a lot of people. Including just about everyone who’s in line to be the next governor of Utah.
That’s what prompted the campaign to gather enough signatures to put the matter to the voters come November, and what prompted Harmons to take a stand.
Friday, the owners of Associated Food Stores — umbrella for the Macey’s, Dan’s, Lin’s, Fresh Market and Dick’s Market nameplates — said that while they take no position on the tax increase, they will also allow anti-tax package volunteers to solicit signatures in their stores.
Herbert and other supporters of the tax reform insist that opponents are acting out not just from emotion, but also from ignorance. They have not, Herbert said, factored in the various prebates, rebates and other breaks that will be aimed at countering the impact of the higher sales tax rate on low- and middle-income households.
But it is downright insulting to the owners of a large, high-volume, low-margin business such as a supermarket chain to suggest that they can’t do the math.
They can. And they know that, however the sums come out, such a large boost in the tax rate on the one thing people can’t stop buying just doesn’t pass the smell test.