Our Utah legislators are telling us that tax reform is necessary to address a large shift in our tax base from goods to services. A substantial change has occurred during the technological revolution of the past 20-30 years, but the current ratio of services to goods is unlikely to increase a substantial amount in the future — a majority of the shift to services has already occurred.
Utah’s legislators and governor say that a new law taxing services is needed to “keep Utah afloat.” However, our current tax structure, in an economy where services play a major role, produced a substantial tax surplus last year. Our legislators’ “keeping afloat” rhetoric implies a further substantial increase in the service/goods ratio is likely to occur. A degree in economics leads me to believe this assumption is a false one.
The taxation of a wide range of services will increase the cost of goods, housing for instance, that incorporate many service costs. Service taxation will also impose onerous tax-reporting burdens on the service providers of Utah.
There is a reason that the only recent attempt by a state (Florida) to tax services failed after only six months of implementation — it was a bad idea! Please urge your state representatives to reconsider their efforts to ram through an ill-considered tax reform bill in only 10 days.
Larry Seeborg, Sandy