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Monday, January 29, 2007

Exactly.

The Tribune published a good editorial this weekend: Tax gamble: Removing grocery tax will make system less stable.

Legislative reaction to editorials is interesting. When we agree, we cheer their insight and obvious good sense ("See, even the ________ [insert local newspaper] got that one right."). When we disagree we ignore them and hope that everyone else does too ("Who reads that liberal rag, anyway?").

This time they were spot on.

An argument can be made that removing sales tax from food is morally right, depending on how you serve up your morals, but it is not the best tax policy.

Excerpts from the editorial:
"Sales tax pays for most of state government except for public education, meaning that when sales tax revenues dip in a recession, funding for most noneducation state programs will dip with it. If the sales tax is removed from groceries completely, those dips are likely to become more extreme.

"A tax expert warned the Legislature about that the other day. He testified that states without the grocery tax tend to have lower bond ratings, because the revenues are less predictable. That raises the interest rates that those states pay. They also tend to have to raise the sales tax rate on other items after they remove it from groceries."
They get it. We're glad someone does. It's eerily similar to the Senate's point of view. More:
". . . One of the goals of former Gov. Olene Walker's tax reform commission was to broaden the base of Utah's system and reduce volatility. This Legislature seems to be moving in the opposite direction."
We are going to cut taxes this year ($150 Million seems about right to the Senate). However, complete removal of the sales tax from food is not the direction we want to head this year. Income tax reform (that benefits all income levels) along with a targeted collection of tax cuts & economic incentives makes a lot more sense to us.

1 Comments:

Anonymous Anonymous said...

Governments have always relied on the masses and particularly the poor masses to fund them. Sad.

1/30/2007 8:04 PM  

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