When the economy begins to falter, is it better to give people a tax cut or to put extra money aside in case the state needs it to pay for services?
That’s an age-old question, and it’s being debated right now on Utah’s Capitol Hill. In this case, however, it’s like fighting over inches on a football field.
That’s an age-old question, and it’s being debated right now on Utah’s Capitol Hill. In this case, however, it’s like fighting over inches on a football field.
By the end of Thursday, lawmakers will have approved a budget of roughly $20 billion. By contrast, the House this week quickly approved a $16 million cut in the income tax Social Security recipients pay. Specifically, this would involve raising the tax-exempt income limit for these recipients from $32,000 to $45,000.
The Senate, on the other hand, is reluctant to take this up, with Senate leaders saying it may be more prudent to keep the money in a reserve fund, especially while the coronavirus and a new war over oil prices threaten to sap Utah’s tourism, convention and oil drilling businesses. The events of recent days indicate Utah’s run of healthy growth may be in for, at the least, a slowdown.
I’m all for austerity. Prudence is a word that has kept Utah ranked among the best managed states in the nation, according to publications such as US News, USA Today and Wallethub. But really, this is like haggling over $16 in a budget of $20,000, to put it in terms most of us can better relate to. That could be a rounding error, or the equivalent of change under a sofa cushion.
A $16 million tax cut isn’t going to stimulate the economy out of any coming recession. It would, however, give seniors an important break.
This is one of those things people don’t pay much attention to until they reach a certain age. If you receive Social Security payments, the federal government taxes you on that income if it equals $25,000 or more ($32,000 if filing jointly) using a formula that combines half your benefit with your total adjusted gross income. Without getting too technical, you may have to pay more if you earn more.
But 13 states, including Utah, tax you a second time on this money.
This wasn’t enough to keep Utah from scoring fourth on Business Insider’s list of the best states in which to retire. It’s not seen as a big drag on the economy. But it’s a big deal if you’re a senior trying to make ends meet. It’s also worth noting that older people vote in large numbers.
Many Utah lawmakers feel a sense of responsibility because last year they set aside $80 million for tax cuts as part of the failed tax reform package. But it’s clear they also feel a sense of foreboding about the economy, which has been so good here for so long.
By all means, prepare for bad times. But if you’re going to be on a list of 13 states that double-tax seniors, it makes sense to give them a little break heading into hard times, as well.
Virtual meetings? Earlier this week, the European Union’s prime ministers and presidents held a meeting via the internet to coordinate a response to the coronavirus. The EUs Parliament, meanwhile, adjourned two days early.
Is this a template for Utah’s Legislature?
The Deseret News reported Tuesday that a bill is being drafted at the Legislature to allow state lawmakers to meet without having to be in the same place. Already, the state Capitol is considered a no-handshake zone, although lawmakers I met there earlier this week were only too happy to shake mine (hmm).
The bill reportedly would allow lawmakers to hold special sessions without actually having to gather at the Capitol.
Having attended several such meetings through the years, I can attest that nothing takes the place of face-to-face contact, and nothing is more common than technical difficulties.
Also, in this case, the sight of several people in House and Senate galleries is a subtle reminder of whose business is being conducted. That would be lost in a virtual meeting.
If such a bill were to pass, it should clearly and narrowly define the type of emergency necessitating it, and require that all proceedings be made freely and easily accessible over the internet.
Then we all should hope it never becomes necessary, and that those who attend remember to wipe down their keyboards.
The Senate, on the other hand, is reluctant to take this up, with Senate leaders saying it may be more prudent to keep the money in a reserve fund, especially while the coronavirus and a new war over oil prices threaten to sap Utah’s tourism, convention and oil drilling businesses. The events of recent days indicate Utah’s run of healthy growth may be in for, at the least, a slowdown.
I’m all for austerity. Prudence is a word that has kept Utah ranked among the best managed states in the nation, according to publications such as US News, USA Today and Wallethub. But really, this is like haggling over $16 in a budget of $20,000, to put it in terms most of us can better relate to. That could be a rounding error, or the equivalent of change under a sofa cushion.
A $16 million tax cut isn’t going to stimulate the economy out of any coming recession. It would, however, give seniors an important break.
This is one of those things people don’t pay much attention to until they reach a certain age. If you receive Social Security payments, the federal government taxes you on that income if it equals $25,000 or more ($32,000 if filing jointly) using a formula that combines half your benefit with your total adjusted gross income. Without getting too technical, you may have to pay more if you earn more.
But 13 states, including Utah, tax you a second time on this money.
This wasn’t enough to keep Utah from scoring fourth on Business Insider’s list of the best states in which to retire. It’s not seen as a big drag on the economy. But it’s a big deal if you’re a senior trying to make ends meet. It’s also worth noting that older people vote in large numbers.
Many Utah lawmakers feel a sense of responsibility because last year they set aside $80 million for tax cuts as part of the failed tax reform package. But it’s clear they also feel a sense of foreboding about the economy, which has been so good here for so long.
By all means, prepare for bad times. But if you’re going to be on a list of 13 states that double-tax seniors, it makes sense to give them a little break heading into hard times, as well.
Virtual meetings? Earlier this week, the European Union’s prime ministers and presidents held a meeting via the internet to coordinate a response to the coronavirus. The EUs Parliament, meanwhile, adjourned two days early.
Is this a template for Utah’s Legislature?
The Deseret News reported Tuesday that a bill is being drafted at the Legislature to allow state lawmakers to meet without having to be in the same place. Already, the state Capitol is considered a no-handshake zone, although lawmakers I met there earlier this week were only too happy to shake mine (hmm).
The bill reportedly would allow lawmakers to hold special sessions without actually having to gather at the Capitol.
Having attended several such meetings through the years, I can attest that nothing takes the place of face-to-face contact, and nothing is more common than technical difficulties.
Also, in this case, the sight of several people in House and Senate galleries is a subtle reminder of whose business is being conducted. That would be lost in a virtual meeting.
If such a bill were to pass, it should clearly and narrowly define the type of emergency necessitating it, and require that all proceedings be made freely and easily accessible over the internet.
Then we all should hope it never becomes necessary, and that those who attend remember to wipe down their keyboards.
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