Unhappy about the higher federal taxes that Congress recently decided to impose?
Plenty of Utahns are not just unhappy but outraged. So outraged that new life could be breathed into the effort to cut state taxes in Utah, reducing the impact of the federal tax hikes.That's why Utah voters can't take for granted the fate of the plan to eliminate the state sales tax on food even though some polls have indicated the likely defeat of Initiative Proposal A.
What folly the approval of this initiative would be. Cutting state revenues just because federal taxes are going up would still be like starving one child just because its brother or sister has developed a voracious appetite.
Consequently, a few reminders are in order as voters prepare to go to the polls Tuesday even though the serious flaws beneath the deceptive allure of the food tax plan should be well known by now.
Certainly those flaws are clear to plenty of knowledgeable and respected leaders and organizations around the state. Among those opposing Initiative Proposal A are Gov. Bangerter, the State Board of Regents, the Utah Hospital Association and local governments throughout Utah. Even the Utah Taxpayers Association, which normally favors anything that even faintly resembles a tax cut, opposes the food tax proposal as a "cruel hoax."
Maybe the proposal would be acceptable if the sales tax on food were phased out gradually or if it were replaced by increasing other taxes. Maybe. But those promoting such a change insist on imposing the proposed cut all at once in mid-1991. And they see it not as a way of shifting part of the tax burden from the poor to others but as an alternative to more sweeping tax reduction plans previously rejected by Utah voters.
Though the main argument for removing the sales tax on food is to help the poor, the fact is that the poor already are exempt from sales tax on food stamp purchases.
Ironically, exempting food from the sales tax would benefit the wealthy much more than the poor.
Likewise, because part of the sales tax is collected from out-of-state tourists, an exemption for food would benefit non-residents of Utah.
And, because the sales tax is an important source of revenue for cities, counties and public transit districts, eliminating the tax on food would make it harder to provide police and fire protection, parks, recreation, public transportation and other services. In some cases, this tax provides as much as 60 percent of community revenues.
Then there's the impact on education. The State Board of Regents estimates that the passage of Initiative A would cost higher education $31 million. This would cut funding for 9,700 students.
Hospitals would be hurt, too. The Utah Hospital Association estimates that the removal of the food tax would deprive this state's 54 community hospitals of $38 million a year in Medicare and Medicaid reimbursements.
What about the argument that Utah can afford to eliminate the food tax because the state has been running budget surpluses? For one thing, Utah can't always count on them. For another, there have been times when surpluses have resulted only because Utah stinted on a variety of state programs.
Finally, keep in mind that the loss of revenue from the food tax could force Utah to tighten its belt by cutting spending in several ways, including spending on welfare and other programs that help the poor. Keep in mind, too, that any change that narrows Utah's tax base and weakens its government finances could also imperil the bond ratings that enable this state to borrow money at attractive rates of interest.
Utah voters rejected a previous proposal to eliminate the food tax in 1980. Clearly, there is still more than ample reason for them to reject it again when they go to the polls on Tuesday.