Leaders of the Utah Legislature are happy to tell us that this is The Year of the Tax Cut.
What they haven’t been able to tell us is, Why?
Clearly, the rapid drive to cut more than $160 million a year from that source of revenue — which is constitutionally committed to funding schools and human services — is less serious legislation than it is performance art.
Lawmakers just get a charge out of saying they cut taxes for Utahns. And, given that SB59 flew through the Senate and is probably already well-greased to pass the House, they are almost certain to have that pleasure.
They are also assuming that nobody bothers to really look behind the curtain, get past the razzle-dazzle, to see what this move really accomplishes.
It ain’t much.
The fact is that the specific cut in the tax rate — from 4.95% to 4.85% — is small potatoes for just about everyone who will get a tax cut. Sponsor Sen. Dan McCay calculates that a family of four making the state’s annual median income of $72,000 will clear about $100 a year in reduced taxes. Or about 8 bucks a month.
Wow. We’re rolling in the dough now.
Of course, families that can only dream of making $72,000 a year will see less, if any, benefit from SB59. While, naturally, households that make a lot more will save a lot more. Not that they’ll notice. Corporations, of course, will benefit the most.
As the tax bill’s bottom line for individual households each month won’t get you out of the McDonald’s drive-thru, McCay and others tout the benefit to the state’s economy as a whole. But that, too, is misdirection.
For one thing, the state’s economy is already booming. Construction cranes dot the skylines of downtown Salt Lake City and the I-15 corridor south to Utah County. Unemployment is practically non-existent as businesses, especially retailers and restaurants, are hard up for workers.
What Utahns know they need is not the price of dinner for five at Chuck-A-Rama once a year, but more state attention to problems that we all face but that we cannot, in our individual capacities, do much about.
We all know that schools are underfunded, housing is unaffordable, highways are snarled, the air is foul and water is getting harder and harder to come by. Police response times are too slow. The demand for mental health care and substance abuse treatment far outstrips supply.
Forgoing a tax cut wouldn’t, by itself, solve any of those problems. But willfully cutting state revenue won’t help, either.
If the point of a tax cut is to stimulate business activity, it’s hard to see that that’s even possible. If the idea is to put out the welcome mat for Fortune 500 companies or the next wave of tech entrepreneurs, the tax cut is pointless at best, discouraging at worst.
Big corporations worry at least as much about finding a healthy, educated workforce and robust public infrastructure as they do about small changes in an already minuscule tax rate. Digital nomads who give a lot of weight to taxes in their migration decisions are at least as likely to be drawn to no-income-tax states such as Wyoming and Nevada.
The best we can hope for, given the unchecked Republican super-majority in the Legislature, is that some additional tax measures, measures that will actually help those who need it, will be included in the final package. Ideas include an earned income tax credit, or an overly complex version of the EITC that Gov. Spencer Cox calls a grocery tax refund.
Better yet, remove the state sales tax on groceries altogether.
Voters can tell their lawmakers what they think about all of these ideas though the legislative website, le.utah.gov.
This year’s production of The Year of the Tax Cut — like bills that attack public lands, demean public education and cling to the use of fossil fuels — is not useful and intelligent lawmaking. It is all so much smoke and mirrors designed to fool Utah taxpayers into thinking someone has their back.
When, really, our backs are what lawmakers are laughing behind.