Sales tax on food — the very phrase is a reminder of how draconian this concept is.
Is it evenly applied? Yes. Is it a sound economic policy? In theory. Is it a moral thing for government to do to its citizens? No.
No matter how strong the tax policies are to support the concept that government should feed off its citizens when they’re buying the most basic of life’s necessities, the moral argument against this regressive tax comes down to one thing: We are better than that.
We as Utahns pull together when tragedy strikes, we bring in meals when people are sick, we help when people are hurt, but somehow, we can’t see the common sense that makes this tax an untenable one.
As governor, I worked tirelessly with the Legislature and stakeholders for two years to pass tax reform in 2006 and 2007. Our goals were bold: broaden the tax base, simplify and bring the overall tax rate down and make Utah an economically sound, business friendly state to ensure our economic competitiveness for years to come. As part of this reform package we fought to remove all of the sales taxes from food.
Our tax reform experience produced unprecedented results — the state’s largest tax cut, a lower, single-rate flat tax along with reforming the corporate tax — all of which allowed Utah to better compete with other states, ultimately driving jobs to our state just as the economy was entering a recession. We also cut the sales tax on food by more than half. We did not remove it entirely, a regret I still have, but we significantly reduced it.
As legislators contemplate a tax reform update, reflecting on the lessons learned from our earlier experiences is instructive.
Yes, our sales tax base is a fickle and unstable thing. Yes, broadening the base always makes economic sense for tax policy. No, sales tax on food is not the answer.
As Utahns we should be appalled that the first solution being dredged up is this low-hanging fruit that not only affects all Utahns but is unimaginative and harmful.
As Utahns we should be appalled that the first solution being dredged up is this low-hanging fruit that not only affects all Utahns but is unimaginative and harmful. The fact that it is dressed up by the idea that it would be covered by a tax credit should only be seen for what it really is. It’s an insurance policy that disproportionately aims the tax at Utah’s most vulnerable population — those who don’t even make enough to file taxes let alone jump through the hoops for a tax credit, which then only comes months after the money could have been used on rent and heat and, well ... food.
If the honest intent is to truly maintain the benefit of this already reduced tax, why provide a credit when an exemption is more effective and already in place? Utah — No. 1 in the nation for volunteerism — currently ranks with six other states with a reduced sales tax on food. There are 32 states in the nation who do not tax food. Now, there are all kinds of studies and data, but this shouldn’t be about data. This should be about doing what is right for Utahns.
Taxing food does not draw businesses in. Taxing food does not improve our quality of life or make employees want to come or stay in Utah. Taxing food is the wrong move.
Republican Jon Huntsman Jr. is a Utah gubernatorial candidate. He previously served as Utah’s 16th governor from 2003 to 2009.