Salt Lake businessman Robert Lapetina is resigned to the fact that he'll probably slip a fatter check into his income tax envelope next year, thanks to the congressional budget compromise.
"My attitude is that there is not very much I can do about it," Lapetina said. "I would like to have seen the burden distributed a little more. It seemed weighted toward high-income people."If everyone paid a little more they would demand more of their representatives. This way, by letting a majority of the people off the hook, they relieve the politicians from the pressure that would come from the people."
The complicated deficit-reduction package is being billed as more of a Robin Hood kind of tax bite, a way to gouge the rich and just prick the poor. Budget experts say those hit the hardest will be earners who bring home more than $150,000.
That means not too many Utahns are involved.
"Utah doesn't have a lot of wealthy taxpayers," said R. Thayne Robson, director of the University of Utah's Bureau of Economic and Business Research. "On balance, the deficit reduction package will not adversely affect Utah."
Jim Byrne, managing partner of Price Waterhouse's Utah office, agrees. "We're probably one of the states that will be least affected."
Many budget watchers agree on one point: The package that Congress concocted over the course of many bleary-eyed weeks brings new meaning to an already over-complicated tax puzzle.
How much the rich will pay depends on those tricky old tax-time friends: deductions and exemptions. Many of the most lucrative are being limited or phased out. And, just as in every major budgetary overhaul, this plan will probably shower accountants and tax attorneys with the biggest windfalls.
Beyond income taxes, however, the plan will also hit consumers at the cash registers. Higher taxes will be tagged onto luxury items and other goods: alcohol, tobacco, airline tickets, furs, jewelry and expensive cars. And in a case of classic bad timing, the federal surcharge on gasoline will rise from 9 cents by another 5 or 6 cents, socking drivers already suffering from the high cost of the Middle East tangle.
Utah pays less in sin taxes to the federal government than many states because of the high percentage of its population married to a healthy lifestyle. But the state government already taxes alcohol and tobacco sales.
Additional federal surcharges could translate into consumers cutting down or eliminating some purchases. And that means the state will have less money to fund its programs, Robson predicts. He thinks the added gas taxes could lead to a shortage of state highway funds, as Utahns will begin conserving again.
But taxes are just a symptom of another problem. The long-running budget boondoggle might cause voters to lose faith in government. "I am totally disgusted with all the idiots in Washington that things have come to this point," said Doug Thompson, a Sandy real estate agent. "They haven't been able to balance the budget.
"You'd think that grown people could address this situation before it got to a crisis."
Peter Billings Sr., a Salt Lake lawyer, thinks the budget shakedown could have been worse.
"I'm less uncomfortable than I might be," Billings said. "Of course, I'm not happy with it, but I think we've all got to pay more to get rid of this deficit. We've all got to learn to pay for what we get."
Auto Dealer Rick Warner agrees that while nobody wants to pay more taxes, higher earners should shoulder their portion of the burden. But eventually, a warped tax system could kill the hard-working American spirit.
"I think the thing that will happen is we are liable to kill the incentive," Warner said. "When we do that, there won't be venture capital coming in because the reward ratio gets out of balance.
"People don't have an incentive to earn more because their taxes go up as they earn more."