By phasing out or eliminating certain special-interest sales tax exemptions and reducing government spending, Utah could eliminate sales tax on food without hurting the state's revenue picture, according to Merrill Cook.
Calling the sales tax on food "regressive and unfair," Cook told the 1989 Utah Anti-Hunger Conference that at least 35 states have already removed it.Of states retaining the tax, "only two or three have a sales tax as high as Utah and it is fair to say that Utah taxes food higher than any other place in the country," said Cook, who was an unsuccessful independent candidate for governor last November.
Sales tax on food is regressive, said Steve Johnson, director of Utahns Against Hunger, which sponsored the conference, because low-income households pay a higher proportion of their income for it. "It's a low-income food issue," he said, "and a regressive tax. Those of us who care about nutrition for those with low-income have to be concerned."
Cook said that people ask whether the lost revenues will be made up by higher property or income taxes or if poverty and other programs will be cut.
"There's absolutely no reason for poverty programs to not be funded because of the sales tax on food," he said. "But to do that we have to take a couple of important steps and finally come to grips with special interest sales tax exemptions. I believe we need general sales tax incentives in Utah, but we don't need narrow and specific exemptions."
Cook cited several examples of what he called "special interest exemptions," including no sales tax on coin-operated laundries or car washes and vending machines. Several companies, he said, like Geneva Steel, asked for and received exemptions when they were starting up, but similar companies don't receive the same tax break.
"It's hard to justify keeping that for a company that makes millions," Cook said, "and we need a sunset provision. Some of the incentives may have been needed at the time, but do we need to maintain them?"
Cook estimated that 13 or 14 of the 33 exemptions in the Utah Tax Code are for special interests and should be eliminated.
The Tax Limitation Coalition will kick off its petition drive at noon Saturday in Ogden at the Municipal Building. The coalition wants to collect 65,000 voter signatures to either force the Legislature to act or to put the issue on the ballot in November of 1990.