The high price of lower taxes

Last week “Polly Policy” wrote an essay entitled “Is a $300 to $400 million tax cut small, medium or large?” that concluded that “…a $300 million tax cut would be somewhere between small and medium. With massive spending in prior years and more to come from the federal government, will taxpayers get some relief this year? You’ll certainly hear about spending pressures from advocates and “non-partisan” analysts, most, perhaps all, of which is justified. A moderately sized tax relief package is also justified.”

At the risk of being accused of being one of those advocates, I would argue that the public deserves to also know the following: 

Relative to our incomes, Utah taxes (state and local combined) are the lowest they have been in 50 years. This follows roughly $2.5 billion of tax breaks (mostly for the wealthiest Utahns) that have been passed in recent decades. That averages to about $100 million annually of new tax breaks for the last 25 years. 

We all love paying lower taxes. But is it possible at some point to conclude that we have gone too far? Is there ever a point where we might begin to wonder whether we might be better off with smaller class sizes and more experienced teachers?

Would Utah benefit if we could reach the national average for high school graduation rates for all racial and ethnic groups, not just for white Utahns? And why shouldn’t we even aspire to exceed national high school graduation rates? We managed to get out of last place for per-pupil K-12 investment, though the share of our incomes going into public education continued to fall — now 3.9%, compared to 6% 25 years ago. 

What about college completion — are we okay with seeing our younger generations fall behind their cohort nationally for Bachelor’s degree and beyond?

How will Utah attract and grow the high paying jobs of the future if we are falling behind the nation for our educational attainment? 

Not to mention infrastructure investment, affordable housing, air quality, disability services, pre-K, full-day kindergarten, 82,000 uninsured children, homelessness, mental health and substance abuse treatment, and the list goes on and on — all areas where our underinvestment — the direct result of all the tax cutting — is costing us. Call it “the high price of lower taxes.” 

At what point do we begin to ask the question, “Are we, as the current generation of Utahns, doing our part, as earlier generations did (paying higher shares of their lower incomes in taxes), to set aside sufficient resources every year to do the things together — through our taxes — that we can’t do as individuals, as families, or through our charitable efforts? 

Matthew Weinstein, MPP is the State Priorities Partnership Director, Voices for Utah Children