Major tax reform is a tough political pill to take
These 15 folks have this in store: They will work long hours over this summer and the fall trying to figure out the best way to reform Utah's long-standing some would say antiquated tax system. And when they finish it all, most likely they'll just see criticism and complaints; the whole Legislature is going to tear it apart. In the end, they'll even see their work product kicked around in newspapers and on TV.
Adding insult to injury, a new Deseret Morning News and KSL-TV poll by Dan Jones & Associates shows that some key parts to any wide-ranging tax reform like broadening the sales and personal income tax bases to include services and doing away with the corporate income tax are hated by most Utahns.
True, legislators and Gov. Jon Huntsman Jr. can probably change some citizens' minds with months and months of public discussion.
But no way can public officials overcome a 90 percent majority in the polls and Jones found in a new survey that 90 percent of Utahns don't want to place the sales tax on health-care services like hospital, doctor and dentist bills.
The Legislature is relearning a hard lesson: Major tax reform is a tough political pill to take.
Governments' tax policies are often not logical. They are not easy to figure out. They have all kinds of intended and unintended impacts on society.
But even a poor system is not easy to change. How tough is tax reform?
In 1992, then-governor-candidate Mike Leavitt promised to study and do away with some of the "outdated" sales tax exemptions.
Fresh from an election, Leavitt got legislators to do away with about a dozen sales tax exemptions, including the exemption for coin-operated laundries and carwashes.
What happened?
Those industries had to start paying the state and local sales taxes. And instead of just eating the 6 percent-or-so tax, they raised their prices the spin-and-dry cost a quarter more, the carwash cost a quarter more.
In a carwash I use on 2100 South, the owners put up brass plaques in each of the washing stalls that said something like: "The quarter increase in the wash cost comes courtesy of Gov. Mike Leavitt and the Utah Legislature."
The angry industries who now had to pay the sales tax hired professional lobbyists.
And over the next two years all but one or two of the exemptions were put back on the books by lawmakers. And Leavitt didn't veto one of them.
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