A new report released this week says Utah's tax system is burdensome, unfair and regressive.
Don't stop the presses on this news. We've heard it before.The amazing thing about taxes is how they grow on you.
If you had told members of the U.S. Congress in the 1920s that Americans at the end of the century would be paying 30 percent and 40 percent of their income to government, they would likely say you were nuts. The people would never stand for it.
Yet that's where we are today.
If you'd told my parents in 1956 that come 2000 they would be paying $1,000 a year in property taxes on the home they had just bought for $25,000 -- well, we couldn't print in a family newspaper what they would have said.
Yet that's where we are today.
The new study was prepared by an ad hoc subcommittee of the Tax Review Commission -- a group of citizens, legislators and tax experts who regularly meet to study state and local government taxes. Often the TRC makes recommendations to the governor and/or Legislature. Occasionally, the TRC undertakes special assignments given to it by the Legislature to study this or that tax issue.
It's not new to learn that Utahns carry an extra-heavy tax burden. We have a lot of children in this state, and it costs a lot of money to educate and care for them.
It's not even new that low-income and moderate-income Utahns carry a tax burden here that they wouldn't in other states, where the tax systems are more progressive.
But Dorothy Owen, member of the TRC and chairwoman of the ad hoc committee, says Utahns and lawmakers have become desensitized to the problem. Little, if anything, is being done about it.
At the very least, Owen says, lawmakers and citizens should start talking about the problems, start thinking about solutions.
And, as her committee points out, there are solutions. And some that wouldn't cost too much money.
To fix the state's income tax bracket problem, for example, would cost $300 million.
"And no one thinks we can do that" -- at least not right away. "But we can start picking away at the issue" instead of doing nothing and letting it get worse, Owen says.
Gov. Mike Leavitt and legislators, led by the majority Republicans in the House and Senate, have given significant tax cuts in the 1990s.
But perhaps those cuts came in the wrong places. At the very least, legislators could have targeted the cuts to help the poorer among us instead of concentrating on across-the-board rate reductions that may have helped everyone but helped the richer people more.
For example, since 1967 the property tax on houses, as a percent of personal income, has actually dropped in a range of between 2.6 percent to 4.7 percent, the new study says.
While a large percent of Utahns own their own homes, and so lower property taxes helps them, many low-income people rent. And holding down the property tax may have less of an impact on them.
The study shows that during the same time income taxes, as a percent of income, have gone up by as much as 3 percent; sales taxes have gone up more than 3 percent. And inflation has pushed more and more poorer Utahns into top state tax brackets. "If two people are working for just $6 an hour, they can fall into the top tax bracket" of 7 percent, Owen says.
Owen says if Utah really wants to help poorer people, it should look to the federal Earned Income Tax Credit. Adopt that on state returns, and a family of four making just $16,000 a year would save an average $624 a year on state income taxes.
"That is something that is targeted and very efficient," Owen says.
A family of four making $30,000 would only save $34. And families making more than $30,000 wouldn't get a tax break at all.
Giving 20 percent of the federal credit on state returns would cost $36 million a year, Owen says, something that legislators could afford.
That sounds like a good way to help poorer Utahns and perhaps would be a good first step.
But here's the crux of the matter. Does the GOP--dominated Legislature want to help one specific segment of society over another?
The cynic among us may say sure -- after all, didn't this same group of fellows vote to give manufacturers a big sales tax break just two years ago?
But in the years I've been watching the Legislature -- and Republicans have been in control all those years -- I've seen little movement to give income tax breaks to some people while not giving them to all.
True, some actions helped one group over another. In 1987, as part of former Gov. Norm Bangerter's tax increases for education, it was proposed to rebracket the state income tax and do away with the deduction for federal income taxes. Rebracketing didn't happen. But lawmakers did take away the federal tax deduction.
Higher-income Utahns screamed, for they were hit harder than low-income residents when the deduction was removed. And the next year Republicans in the House and Senate restored half of that income tax deduction.
Utah taxes are unfair to low-income citizens, that seems clear.
But in a 2000 Legislature struggling to find more money for education, I don't know if anything will be done about the concerns pointed out in Owen's report.
"At least we should study ways to help" get the tax system on fairer ground after the 2000 Legislature, Owen says. And perhaps lawmakers will smile on the need for further study. They always seem to like that.
Deseret News political editor Bob Bernick Jr. may be reached by e-mail at bbjr@desnews.com