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Guest opinion: When it comes to tax reform, time may be the best teacher

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The House of Representatives convenes to debate a tax reform bill after it was passed by the Senate during a special legislative session at the Capitol in Salt Lake City on Thursday, Dec. 12, 2019.

Spenser Heaps, Deseret News

One of my all-time favorite movies is a holiday picture, “It’s a Wonderful Life.” I doubt I’m alone in that. Even at the time of its release, it was a smashing box office success, and won Academy Awards for best picture, best director (Frank Capra) and best actor (Jimmy Stewart), right? 

Wrong, wrong, wrong and wrong. The 1947 film was a box office disappointment, and all those awards went to a movie few can remember called “The Best Years of Our Lives.” 

But the topic here is tax reform. What does that have to do with Zuzu’s petals?

It’s this: We often don’t get things right the first time, and time is a teacher. The writings of our nation’s founders are replete with concerns about trying to get the U.S. Constitution right, while admitting that they won’t, and that they need to make room for getting things wrong. They were very distrustful of human nature, and the form of government they proposed was meant to be a bulwark against human imperfection. “If men were angels,” James Madison wrote, “no government would be necessary. If angels were to govern men, neither external nor internal controls on government would be necessary.” This all indicated a healthy measure of humility in governing.

Thus, we have a Bill of Rights. Thus, our Constitution can be amended. Yet some of the original issues have never been resolved. Going back to the debates between the Federalists and Anti-Federalists, the role of the federal government has been in tension with its subsidiaries. While the Federalists won and the role of the federal government’s reach has certainly expanded, the debate isn’t over. In fact, if there is one drum Gov. Gary Herbert has beaten most loudly, it is that states ought to play a greater role in determining their own destinies. Reform efforts march on, pushing toward greater federal or state power on this issue or that.

So it goes with tax reform. The reforms made now end up being part of a longer process. And significant reform isn’t easy, nor it doesn’t always win friends. As Thomas Jefferson once put it, “Politics … holds up the torches of martyrdom to the reformers of error.”

The particulars of the current tax reform were wide open for debate, with the necessity of a tax cut, the sales tax on food and education funding among the most contentious issues. But I would submit that most Utahns are tax reformers to some degree, even if they don’t know it. To shift from a Jeffersonian to a Jeff Foxworthian approach, consider the following propositions. 

If you think Utah’s long, seemingly arbitrary list of sales tax exemptions is a problem, you might be a tax reformer.

If you think Utah’s growing list of earmarks unnecessarily ties the hands of policymakers, you might be a tax reformer.

If you think the state income tax hit that middle-class Utah families with children took as a result of the 2018 federal tax changes needs to be addressed, you might be a tax reformer.

If you think the growing pressure on the general fund due to factors such as rising Medicaid costs needs to be addressed, you might be a tax reformer.

If you think the fact that Utah has seen the nation’s second-biggest long-term decline in taxable sales as a proportion of consumer expenditures is a problem that ought to be addressed by capturing more consumer activity, you might be a tax reformer.

This list could be longer, but if you think any such things, you might be a tax reformer. 

However, even if you could get your wish list for reform fulfilled, it must be remembered: Whoever believes tax reform perfection can be achieved might as well try to lasso the moon. New problems will always creep in and magnify with time. Did anyone 40 years ago think we would see a massive shift in consumer expenditures from taxed goods toward untaxed services? Did the legislator of yore, pushing for an exemption “just this one time,” realize its contribution to a snowballing collection of exemptions that, by their own justifications, justified still more similar types of exemptions?

With all that said, I’m willing to make a bold prediction: Regardless of the tax reforms we’re getting today, there will be a call for more reforms tomorrow.

Peter Reichard is president of Utah Foundation, a nonpartisan, nonprofit public policy research organization. Reach him at peter@utahfoundation.org.