It's time to remove the sales tax from food in Utah

When watching a deliberative process such as lawmaking, it’s easy to get sucked into feeling overly excited about small steps without considering the mountains that lie ahead.

Even football fans know not to dance in the aisles too much over a first down, and so those who care about the poor in Utah should contain themselves.
They scored a first down last week when the Utah 

House voted to completely remove the sales tax from food. But Senate leadership, guardians of the next step toward making this a law, seems unimpressed.

They’re repeating age-old arguments about how taking food off the tax rolls would make things too unstable during hard times. When wallets get thin, people stop buying luxury items, but they always need food, etc., etc.

That’s a difficult argument to take seriously when you stack it up against the tax exemptions being thrown around.  Another bill scoring first downs would give an extra $5 million, on top of millions already in place, to film companies that agree to do post-production work in Utah. The state already exempts a number of industries and services from various taxes, and it was prepared to give an undisclosed bounty to Amazon if it wanted to put its second headquarters here, which it didn’t.

Clearly, state lawmakers don’t mind destabilizing tax bases for wealthy corporations. I could site a list of studies that examine the sub total of tax giveaways nationwide, including to sports teams and stadiums (Utah’s gift of hotel room taxes to a soccer stadium come to mind), and that conclude the returns don’t equal the expenditure.

Big companies bring in jobs. I get that, even though the returns on tax exemptions often are dubious. But governments have a responsibility to more than just job creators. The poor among us exist outside the reach of much of what economic development provides.

But it also would be wrong to simply dismiss or overlook what just happened. Even a first down deserves some applause, and the 42-27 vote in the House to bring the state portion of the sales tax on food to zero was remarkable.

Utah is in a strange place when it comes to taxing food. Years ago, lawmakers reduced the state’s portion of that tax to 1.75 percent, less than half of the 4.7 percent on everything else in stores. The tug-of-war since then has been between those who would restore it to the full amount again and those who would eliminate it completely.

A year ago, that tug-of-war seemed to be listing dangerously close to restoring the full tax. Advocates for the poor and elderly were on their heels until late in the session, when Senate President Wayne Niederhauser said the experts had done the math and found that food makes up only about 11 percent of all sales taxes. Restoring it to the full sales tax would bring in a measly $175 million per year, which isn’t much in a state where the overall budget totaled more than $15 billion last year.

So now the momentum has swung in the other direction, at least a little bit. But it won’t be enough for a victory.

For one thing, the bill would raise sales taxes on everything else to 4.92 percent to make up for losses. That has some lawmakers howling that it would violate a conservative principle that says it’s best to remove tax exemptions, broaden the base of taxpayers and reduce overall rates.

That kind of talk makes Steven Erickson, a long-time low-income advocate in Utah, roll his eyes. “It’s like a tape loop,” he told me Monday. “They talk about it all the time, but they never do anything about it.”

It is true that people with calculators are beginning to total up the potential tax increases floating through the capitol this year. A transportation bill proposes to raise sales taxes, as does an initiative known as Our Schools Now, which would raise sales and incomes taxes for public schools.

It all adds up, as do the breaks state and local government give to businesses and industries.
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But this isn’t so much about the money. It’s about helping the poor with things they have to buy to stay alive. Most states already exempt food from sales taxes. With the economy booming, it’s time Utah did more than just score an occasional first down on the subject.