Timing may not be everything, but it doesn’t hurt when you’re a Utah lawmaker raising taxes.
With the price of oil hovering around $30 per barrel, people hardly noticed when the state began collecting another 5 cents per gallon on New Year’s Day. And, while the price of gas, as I write this, averages $1.93 per gallon in Utah, which is a full 10 cents higher than the national average, hardly anyone notices. Once it drops below $2, who quibbles over cents?
A public that tends not to pay attention unless bad things become obvious isn’t likely to make those 2015 decisions an issue this November.
But you can’t count on timing always being so good, especially when you’re doing something that directly affects the economy.
Last year’s legislative session was unusual in that
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normally conservative, anti-tax-hike lawmakers were not shy about raising taxes. In addition to the gas tax, they raised property taxes by a combined $75 million to help fund schools. That, too, seems to have been absorbed painlessly, the result of an unemployment rate at 3.5 percent and steady job growth.
Good timing, again, but let’s hope the trend ends there.
When the discussion turns to taxes at a dinner party (which, come to think of it, may be a sign your party is in trouble), there are two things you can be sure will generate disbelief among guests. The first is to tell them that people, at least in this state, pay less in state and local taxes than their parents might have a generation ago. The second is that, despite this, living in Utah is no tax bargain.
Trust me, they will tend to be less inclined to believe the former than the latter. That’s understandable.
The Tax Foundation, based in Washington, has released its latest rankings on state and local tax burdens by state. Utah came in 21st highest, which is to say on the high end of the middle of the pack. The survey said about 9.6 percent of our total income statewide goes to these taxes.
But the figures are based on the way things were in 2012, which means last year’s tax hikes — not just by the Legislature but by other local governments — were not included.
And while middle-of-the-pack may be regarded as neither bad nor good, Utah’s local tax burden clearly was the highest among its neighbors. Arizonans paid 8.8 percent, which was about the same as Coloradans. Wyoming residents, at 7.1 percent, had the third lowest burden in the nation.
The survey’s methodology takes into account what people spent in states other than their own, as well as the local taxes paid by people who visited your state. Taxes are complicated, but about 78 percent of your local taxes are collected from locals like you.
If you really want to impress your dinner guests, the Foundation’s website includes a chart of these figures going back to 1977. That year, the state and local tax burden in Utah was 10.7 percent. It rose to 10.8 percent in 1990 before falling more than 1 percent to today’s level.
This is along the lines of a Utah Foundation report about a decade ago that showed Utahns pay less in property taxes, as a percentage of income, than they did in 1965.
Of course, history means little when you’re digging into your pocket to give money to government. Ask a roomful of people how much of a tax burden seems appropriate and you’re likely to find yourself wishing you were closer to the door.
What does this all mean? Very little, unless politicians understand that every dollar they collect for government is a dollar people could have spent on other things, including personal savings. Low unemployment rates and job growth are not a given. People won’t move here for the mountain scenery alone. Government has legitimate needs, including a high burden for public education, but it can’t lose sight of who ultimately pays the bills.
For now, don’t worry. Despite voters’ short memories, election years do not lend themselves to tax hikes. That’s one aspect of timing that isn’t lost on any politician.