File this under, “quit your whining.”
Of all the truisms in politics, this one has held steady throughout my years of observation: No one notices when their tax burden falls. People don’t party in the streets or throw confetti from tall buildings when they get to keep more of their hard-earned money gradually, over a period of years. We typically don’t notice anything that happens gradually, except maybe weight gain and hair loss.
Of all the truisms in politics, this one has held steady throughout my years of observation: No one notices when their tax burden falls. People don’t party in the streets or throw confetti from tall buildings when they get to keep more of their hard-earned money gradually, over a period of years. We typically don’t notice anything that happens gradually, except maybe weight gain and hair loss.
And yet, according to a new report from the Utah Foundation, a non-partisan research group, Utah had the sixth largest overall decrease in tax burden between the years of 2007 and 2016, the latest year for which detailed figures are available.
There, don’t you feel happier?
The decrease was driven by Utah experiencing the third highest increase in personal income nationwide during that same time, and by its growing population. You’re getting richer, even though your life is getting more crowded with people.
Sounds great, right? When you adjust for inflation, personal income in Utah rose 32% during that decade. Only North Dakota and Texas did better.
Well, maybe it’s good news. The report notes this could be a problem when the falling tax burden is based mainly in population growth. “If tax revenues are not growing as quickly as personal income generated from new Utahns,” they might not be enough to allow governments to keep providing services.
Which brings us to the state Legislature’s tax reform efforts. You might have forgotten about this. Lawmakers were promising a special session last summer to pass some sort of reform, but that never happened. That doesn’t mean the effort is dead, at least I don’t think so after all those public hearings. And the underlying premise to that whole effort was the alleged loss in sales tax revenue compared to other taxes -- something a lot of people have treated skeptically, considering sales tax revenue has been growing steadily.
Turns out the Utah Foundation report adds some credence to the Legislature’s argument. In 2016, Utahns paid an average of $22.56 in sales taxes for every $1,000 of personal income. That’s one-third less than they paid in 1993, and 27% less than in 2007.
The report says this is happening in part because people are buying fewer goods and more services, which typically are not taxed. Utah’s drop in sales taxes is the biggest slide in the nation since 1993, and the third largest since 2007. In fact, the decrease in our sales tax burden makes up one-third of the total overall decrease, the report said.
You might feel good about this. Who wouldn’t? The only problem is that, in Utah, the income tax is earmarked entirely for public and higher education, which means much of the rest of what state government does depends on the sales tax.
A lot of people are fond of saying Utah doesn’t have a tax collection problem, it has a tax distribution problem. But a recent poll for Y2 Analytics found only 30% of Utahns support opening up the income tax for things other than education. That means the distribution problem won’t be easy to solve, unless politicians are willing to go against public opinion.
Newspaper columns on taxes can be as dry as the Salt Flats on a July afternoon, but there is one aspect of the Utah Foundation report I still need to address. Many of you no doubt will react strongly to the notion that your tax burden is falling, mainly because your property taxes keep rising.
The report notes that, of all the taxes, property taxes have gone up right along with personal income.
But this tax, which funds local governments, is low. Utah ranks 34th in terms of its property tax burden, which makes it the lowest ranking of all the taxes imposed in the state.
Two more truisms come to mind. The first is that it would be hard to find a bureaucrat who doesn’t believe his or her particular arm of government isn’t underfunded.
The second is that it’s hard to find a taxpayer who doesn’t believe he or she is taxed too much.
Cold, hard facts aren’t likely to change either perception.
Still, it’s nice to know there are many places far more burdensome to live than right here.
There, don’t you feel happier?
The decrease was driven by Utah experiencing the third highest increase in personal income nationwide during that same time, and by its growing population. You’re getting richer, even though your life is getting more crowded with people.
Sounds great, right? When you adjust for inflation, personal income in Utah rose 32% during that decade. Only North Dakota and Texas did better.
Well, maybe it’s good news. The report notes this could be a problem when the falling tax burden is based mainly in population growth. “If tax revenues are not growing as quickly as personal income generated from new Utahns,” they might not be enough to allow governments to keep providing services.
Which brings us to the state Legislature’s tax reform efforts. You might have forgotten about this. Lawmakers were promising a special session last summer to pass some sort of reform, but that never happened. That doesn’t mean the effort is dead, at least I don’t think so after all those public hearings. And the underlying premise to that whole effort was the alleged loss in sales tax revenue compared to other taxes -- something a lot of people have treated skeptically, considering sales tax revenue has been growing steadily.
Turns out the Utah Foundation report adds some credence to the Legislature’s argument. In 2016, Utahns paid an average of $22.56 in sales taxes for every $1,000 of personal income. That’s one-third less than they paid in 1993, and 27% less than in 2007.
The report says this is happening in part because people are buying fewer goods and more services, which typically are not taxed. Utah’s drop in sales taxes is the biggest slide in the nation since 1993, and the third largest since 2007. In fact, the decrease in our sales tax burden makes up one-third of the total overall decrease, the report said.
You might feel good about this. Who wouldn’t? The only problem is that, in Utah, the income tax is earmarked entirely for public and higher education, which means much of the rest of what state government does depends on the sales tax.
A lot of people are fond of saying Utah doesn’t have a tax collection problem, it has a tax distribution problem. But a recent poll for Y2 Analytics found only 30% of Utahns support opening up the income tax for things other than education. That means the distribution problem won’t be easy to solve, unless politicians are willing to go against public opinion.
Newspaper columns on taxes can be as dry as the Salt Flats on a July afternoon, but there is one aspect of the Utah Foundation report I still need to address. Many of you no doubt will react strongly to the notion that your tax burden is falling, mainly because your property taxes keep rising.
The report notes that, of all the taxes, property taxes have gone up right along with personal income.
But this tax, which funds local governments, is low. Utah ranks 34th in terms of its property tax burden, which makes it the lowest ranking of all the taxes imposed in the state.
Two more truisms come to mind. The first is that it would be hard to find a bureaucrat who doesn’t believe his or her particular arm of government isn’t underfunded.
The second is that it’s hard to find a taxpayer who doesn’t believe he or she is taxed too much.
Cold, hard facts aren’t likely to change either perception.
Still, it’s nice to know there are many places far more burdensome to live than right here.
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