Starr: Utah’s Tax System Needs Reform. A Food Tax Isn’t the Answer.


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By Kennedie Starr, Opinion Writer

Utah’s current tax system is no longer sufficient for the state’s economic well-being.

The system hasn’t changed in decades, and the sales tax base has declined from 67% of personal income to 42% since 1980. State lawmakers agree that something needs to change. The Kem C. Gardner Policy Institute’s data shows the tax base declining to just 35% of the economy within the next 10 years. If quality education and life supporting services — which the government provides through tax dollars — is something we wish to see maintained, then it’s time for a modern tax system that reflects Utah’s values and establishes equity.

The economy and the state’s revenue streams have shifted as more people in the past purchased goods, which resulted in a healthy supply of sales taxes to support our communities. Over time, Utahns began spending less on goods and instead started to spend their income on services. This becomes problematic as many services are not taxed. This is one of the main concerns the state legislature is analyzing and speaking to communities about through town halls and public meetings.

The legislature recognized the revenue dilemma and passed HB 495 during the most recent legislative session, creating a task force to study the issue of taxation and propose recommendations for the next round of intense policy crafting. The bill passed in the final days of the 2019 General Session, as an earlier attempt to expand sales tax on various services failed with HB441, which stirred up too much controversy about what should and shouldn’t be taxed. The Tax Restructuring and Equalization Task Force is a group of 10 legislators, with five members from the Senate and five members from the House. The Republican supermajority, which characterizes the legislature as a whole, carries over into this hand-selected group, with only two Democrats having seats at the table which has implications for policy formation.

The group has held several public meetings over the past few months with the goal of grasping what Utahns from different parts of the state are thinking about when it comes to restructuring the tax system. This listening phase is significant and has sought to give communities access to their officials and the law-making process in a critical way. It’s important that all parts of Utah are considered when rewriting something as large as the tax structure, which impacts the roads people drive on, each school’s ability to educate children and the programs in place to help people live healthy lives. The touring of the state began in June and went through July, where stops were made in Brigham City, Moab, Roosevelt, Utah County and Salt Lake County. These meetings were meant for listening, understanding and exploring solutions. The Legislature’s determination to gather as much public opinion and input as possible is pretty different than the tone taken to the voter-approved ballot initiatives which were heavily altered, to say the least, only months prior to these Task Force meetings.

One possible route legislators are thinking of taking is reinstating a full sales tax on food. This is one of the more inequitable options and should be flat out rejected as the method of restructuring the tax system to supply a future for communities to prosper in. At first-glance, taxing items like groceries appears to be equitable as everyone pays the same, set amount. However, the reality is that someone earning a smaller income pays a much weightier part of their total earnings on essentials like food than someone earning a higher income. Taxing food is an unfair, regressive toll that should be tossed from the list of options being considered. Furthermore, most Utahns do not want a food tax, according to polling. A survey by Y2 Analytics found that ‘two-thirds of Utahns don’t want the state sales tax put back on unprepared food.” If listening to constituents is the goal of our elected officials, as it appears to be through the format of the task force meetings, then they should hear that food tax opinion loudly.

Taskforce co-chair Senator Hillyard stated that the approach of the task force will not be to expand taxation on everything but rather “pick those that are low-hanging fruit.” However, if the imbalance is as dramatic as lawmakers are saying, then perhaps a look into larger, yet equitable, solutions will be the necessary route. Taxing food may be considered by some to be the “low-hanging fruit,” but they hurt our communities through an imbalance, are unpopular according to data and can contribute food insecurity.

If the government is tasked with the job to “promote the general welfare” of every citizen, then that job must be met with sufficient and reliable funds with equity at the forefront. While taxes aren’t the most pleasant part of participating in society, they are the critical sources of everything else that is truly enjoyable. Public safety, loaning books from the city library and programs which feed kids breakfast at schools are only a few of the services that initially come to mind when reflecting upon the need for a solid taxation system both at the federal and local level. Let us ensure that the policies going forward don’t enhance disparity.


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