Utah “Tax Reform” III

Yesterday’s special session of the Utah legislature went about as expected. Having already obtained the support of the Republican party, Huntsman’s tax reform proposals were all passed. Nor is Huntsman through; in an interview on KCPW today, he acknowledged that the legislation passed was only a first step in his tax reform goals. Huntsman reaffirmed his interest in continuing to move toward a flatter tax, ultimately abandoning the “dual-track” system and moving closer to a true flat tax (also see the Deseret News).

Now that its done, we can only hope that Huntsman’s rational is correct. He has claimed multiple times that the tax cut will benefit the entire population—and education specifically—by stimulating economic growth, luring new employers into the state, increasing the tax base, and thereby increasing the funds available for education. The logic is dubious to me. “Trickle down” economics are far from proven. While such policies have, in the past, stimulated economic growth, the benefits have typically been enjoyed primarily by the wealthy.

Nevertheless, the change has been made, and given the governor’s track record of general good-will, I’m willing to give it a chance. I hope that the citizens of the state and informed observers pay careful attention to the consequences of the new tax over the next few years. If the scenario plays out as Governor Huntsman predicts—economic development which benefits the lower classes as well as corporate Utah and the wealthy, and increased funds for education and other vital government programs—I’m willing to give credit where credit is due. Lets permit further reform and “flattening” (flatification? flattizement? flatulence?)

But if the results are not what the Governor suggests‐if the available funds for education stagnate or diminish and the economic development benefits only the upper-class at the expense of the poor, then I hope the citizens and politicians will acknowledge the mistake, work to repeal his plan, and pursue a truly egalitarian tax reform.

My generally good impression of Huntsman is reinforced by the fact that Huntsman would ultimately like to pursue a tax system with few or no deductions—including the elimination of the deduction for charitable giving.

The state income tax change was not the only bill to come out of the special session. The legislature also passed a bill permitting Salt Lake County to raise sales taxes to pay for transportation projects. Some claim that property taxes, or some combination of sales and property, might have been a more appropriate way to obtain these funds. I haven’t studied this particular issue enough to say, and I’m not going to quibble. Developing a progressive, effective public transportation system is a good way to enhance the valley. The proposed improvements, with four East-West Trax spurs—including a rail to the airport—would make us a model for public transportation in the West, and would benefit the entire population. I’m perfectly willing to pay higher taxes for that.

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