Last week Republican Representative Kay McIff advocated increasing taxes on working families through an increase in the tax on food. This week Republican Senator Howard Stephenson, President of the Utah Taxpayers Association, joined him. 
The November issue of The Utah Taxpayers Association newsletter dedicates its first full page and a half to chastising the Utah Democratic Party for advocating a fairer tax code and then states "most people realize that businesses don't pay taxes, but customers, employees and shareholders do."
Then Senator Stephenson uses his My Corner column to state cutting the food tax with an eye toward eventually eliminating it altogether was a huge mistake. Among other things "Corporate and individual income taxes should have been reduced..." instead. Corporate income taxes? Apparently Senator Stephenson didn't get the memo stating "most people realize that businesses don't pay taxes", people do.
Senator Stephenson then proposes increasing the food tax to 4.75% and thereby adding an additional $188.57 annual burden on Utah working families. Families making "no more than 150 percent of the federal poverty line" ($33,075 for a family of four) should be eligible for a tax credit to defray all or part of this added expense he says, but whatever money that's left over should be used to reduce income taxes, the state's $800 million revenue short fall notwithstanding. After all, "If the Legislature uses the remaining $116.8 million to lower the state income tax...the state would lose no revenue."
Under Utah's constitution, income tax revenue is dedicated solely to education. Sales tax revenue isn't. Therefore, schools would stand to lose the $116.8 million Senator Stephenson is proposing cutting from income taxes. The impact of this proposed income tax cut on per pupil spending - already the lowest in the nation - is completely ignored by Senator Stephenson.
While Stephenson and others go on and on about tax cuts benefiting the economy and fueling growth (trickle down economics), the role a strong public education system plays in attracting companies seems completely lost on them. Utah is already spending about $1,000 less per pupil than the state coming in 49th in education spending. Teachers salaries are becoming less and less competitive with each passing year and, if my daughter's recent experience with public education is any indication, many text books are woefully out of date. Numerous schools are also lacking up to date technology that would help us graduate students ready to compete in the modern world.
Now is not the time to hit working families with a tax increase and simultaneously reduce spending on education. Any benefit to Utah's economy would be short term at best. With a rainy day fund and numerous examples of corporate welfare riddling Utah's tax code, Senator Stephenson and other Utah legislators don't need a lot of imagination to come up with better solutions than this.
6 comments:
Isn't the unofficial mission of the Utah Taxpayers Association to ensure that only middle class and working families pay taxes?
Howie Stephenson and the Utah Taxpayers' Association are the Great Satan, but your public education argument doesn't hold water since higher education receives both income tax and sales tax dollars. An increase in sales tax dollars would reduce higher education's dependence on income tax dollars which would then increase income tax funding for K-12 education. In fiscal year 2010, higher ed will receive $439 million in general fund (mostly sales tax) and $255 in income tax dollars.
If the sales-income tax shift is revenue neutral (not sure if that's Stephenson's proposal but that would be my guess), the Legislature would have the same funding for higher education and K-12 combined. Then it would simply be a budgeting decision as to how the funding is split between the two.
That's why those of us who support our Utah public schools have always been concerned about sales tax cuts of any kind even though public schools don't get sales tax dollars.
And even if taxing corporations is just a way to tax customers, workers and shareholders, so what? We've got to fund education somehow. If taxing corporations is just a way to hide taxes, then we need to do more of it, and the voters will support us on that.
Taking money out of the education fund means that every year higher ed has to fight with Medicaid and the prisons, among other things, just to break even with the year before. That has worked really well for them since the flat tax passed and cut the education fund a couple years ago. That is wny new cuts to the income tax rate will guarantee future cuts to education. Eventually they will start talking about privatizing the University of Utah the same way people are now talking about privatizing the University of Michigan. Who will be able to afford a college education then?
Like it or not the realities of the present situation requires tax increases. Putting the tax back on food is a progressive, in my opinion, tax because it more evenly spreads the burden around of taxation on those whose large families are straining our school budgets and other services.
If we have to tax, it is as good a place to start except for perhaps taxing the free health care all the state legislators receive. Why not a 50% tax on all medical services they receive by charging them premiums of say 1/2 what I have to pay.
With regards to K-12 education, adding or taking money from sales tax is no different than adding or taking from income tax.
Rings True Ballot Initiative would be a healthy measure to restore the income tax burden on the middle-class.
It is a tax cut of $150 million on the middle class, due to it's graduated tax rates and wider brackets. It raises revenues by $270-325 million for education. Go to www.utahtax.org for information.
Just raising taxes across the board by 3/4 cent is another business community effort to tax the workers of Utah.
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