Enacting comprehensive, forward-looking tax reform is just about the toughest public policy challenge that state legislators can tackle.
When citizens are used to a long-standing tax system, however antiquated, it’s difficult to change it, even if the new system will be better for almost all concerned.
Thus, legislative leaders promoting tax reform are hearing scornful criticism, even some personal attacks. And a lot of the opposition is inaccurate and unfair.
Personally, I applaud legislative leaders and those working to improve Utah’s tax system. It has taken real courage and fortitude to propose fundamental tax reform. I hope they will not listen to the naysayers and will get the job done in the planned Dec. 12 special session.
The predictions of doom will not come true. The vast majority of citizens will benefit. Future generations will be grateful. Just do it.
Modernizing Utah’s tax system will be a generational accomplishment for Utah’s Legislature – a crowning achievement in any lawmaker’s career.
Here are some of the criticisms (tax reform myths) I’ve heard, and my responses.
Lawmakers are moving too fast without sufficient study and input. There has been plenty of study and plenty of input. All the facts are known. All the arguments have been heard. All the scenarios have been scrutinized. All the impacts on all the different income levels and demographic categories are quantified.
More delay will not help. There will always be opponents and naysayers, no matter how long tax reform is studied. Delay is just an excuse to sabotage the process.
And remember an important fact: This tax reform package, as is the case with all complex legislation, will require future tweaks. It won’t be perfect, initially. Improvements will need to be made. And they will be made in future legislative sessions. That’s to be expected.
Tax reform is really about tax increases. This, of course, is a lie, when the reform elements are taken as a package. But anyone watching social media would think this is a massive tax increase. Certainly, some taxes will go up and some will go down. Certainly, there is something in tax reform for everyone to hate. But the only fair way to view it is as a package. If I pay a bit more in sales taxes, but get a bigger income tax cut, that’s a net tax cut. It’s certainly fair to ask how tax reform impacts me, personally. But you have to look at the entire package to make a fair assessment.
Tax reform will hurt education. The tax reform plans, combined with the education funding proposal, will improve education funding for the long-term, not hurt education. The constitutional education earmark is a fragile funding guarantee. Much better would be a permanent commitment to automatically fund growth and inflation in education, while putting in place a system for additional funding increases, including by requiring a larger local contribution to education funding.
House Speaker Brad Wilson notes that Utah is fifth highest in the nation in the proportion of education funding provided by the state. But Utah is 33rd in local district contributions. A fundamental rewriting of the education funding system is needed, reflecting the modern economy.
Legislative leaders know full well that they’ll never get the constitutional earmark changed without full support from the education community. It’s very simple messaging to get citizens to vote against the constitutional amendment. Without education support, the change will be defeated.
I fully support significant increases in education funding, especially for teacher salaries. I believe that legislative leaders are sincere in their desire to create a tax system that will bolster long-term education funding and make a real difference.
Tax reform will hurt low-income people. It will actually help low-income people, not hurt them. Low-income people will be eligible to receive double the amount they currently save in food taxes. Tax reform won’t increase income inequality. In fact, it will help ensure that low-income people continue to receive the variety of benefits they enjoy long into the future. A failing tax system is a much bigger threat to low-income people than responsible tax reform the ensures a balanced tax system that meets the needs of the state – and low-income people – for future generations.
It’s time for fundamental tax reform that creates a tax system reflecting the modern economy. Utah’s legislative leaders are to be commended for proposing such a system. I hope they will make it happen, despite uniformed opposition.