Increased Grocery Taxes? Rewriting History
Rep. Kay McIff opines that Utah should raise taxes on groceries. As I wrote in February, that's a really bad idea. Government revenues are down, because people's revenues are down. The solution to Government's woes is not to take more money from its citizens.
In arguing that people need to better support Government, Rep. McIff states, "The two-year-old promise of elimination was impractical and doomed from the start." Because it is important to sort fact from fiction in the policy arena, I have to go on record to state that Rep. McIff's notion of a "promise of elimination" is fictional.
After a series of discussions with Speaker Curtis, I proposed the idea of eliminating the food tax at tax reform committee during the summer of 2005. The House tended to like the idea, and the Senate did not like the idea. The next general session (2006), Rep. Merlynn Newbold ran legislation to reduce the food tax. The battle between the Senate and the House on that issue was one of the biggest I've been involved in during my 9 years in the Legislature. I would think that the importance of that fight would cause any legislator to remember the broader details.
The compromise was that the food tax and the income tax would be partially reduced. Neither side of the battle and no individual got everything desired. All participants and all citizens were left to revisit the issue as they so desired. Never was a promise made that the food tax would be eliminated. Quite to the contrary, some in the Senate wanted a promise that no further efforts would be made to reduce the food tax. Likewise, that promise was not made. Both sides have stood down, since then.
The underlying issue in these arguments is the proper role of government. Rep. McIff represents a side of the argument that believes people were hurt by the tax cuts, and that those dollars would sit better in Government coffers than people's pockets. Sure, many would feel better about pocketing or redistributing other people's money, but I believe that people are best helped by citizens keeping more of their own money. Overall, individuals do better things for the economy and their neighbors than government does. Individuals create jobs, buy things, pay bills, and invest. By taking more from our citizens, we stifle them and their families and, thereby, hurt our overall economy. We build more Government and undercut free enterprise.
If Utahns agree that they do better with their money than Government does, they better speak up. The tax spenders are out in force.
In arguing that people need to better support Government, Rep. McIff states, "The two-year-old promise of elimination was impractical and doomed from the start." Because it is important to sort fact from fiction in the policy arena, I have to go on record to state that Rep. McIff's notion of a "promise of elimination" is fictional.
After a series of discussions with Speaker Curtis, I proposed the idea of eliminating the food tax at tax reform committee during the summer of 2005. The House tended to like the idea, and the Senate did not like the idea. The next general session (2006), Rep. Merlynn Newbold ran legislation to reduce the food tax. The battle between the Senate and the House on that issue was one of the biggest I've been involved in during my 9 years in the Legislature. I would think that the importance of that fight would cause any legislator to remember the broader details.
The compromise was that the food tax and the income tax would be partially reduced. Neither side of the battle and no individual got everything desired. All participants and all citizens were left to revisit the issue as they so desired. Never was a promise made that the food tax would be eliminated. Quite to the contrary, some in the Senate wanted a promise that no further efforts would be made to reduce the food tax. Likewise, that promise was not made. Both sides have stood down, since then.
The underlying issue in these arguments is the proper role of government. Rep. McIff represents a side of the argument that believes people were hurt by the tax cuts, and that those dollars would sit better in Government coffers than people's pockets. Sure, many would feel better about pocketing or redistributing other people's money, but I believe that people are best helped by citizens keeping more of their own money. Overall, individuals do better things for the economy and their neighbors than government does. Individuals create jobs, buy things, pay bills, and invest. By taking more from our citizens, we stifle them and their families and, thereby, hurt our overall economy. We build more Government and undercut free enterprise.
If Utahns agree that they do better with their money than Government does, they better speak up. The tax spenders are out in force.
posted by steve u. at 11/02/2009
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8 Comments:
I am all for government (especially the federal government) cutting spending. I don't mind a food tax because everyone pays it and it is relatively painless. It is also indirect taxation. If ever there was a tax that irks me it is the income tax.
Government is supposed to serve the people and it can do that best by balancing its budget and periodically re-examining the services it provides with the object of cutting or reducing those that can be better delivered by the private sector.
With the state faced with a pretty enormous deficit, how do all the needs get met without some sort of tax increase?
I was at a budget forum last week where the grim numbers were discussed, and someone asked what moral responsibility the government has to take care of those who cannot care for themselves. I think this year may provide some interesting discussion in response to that question.
Senator Urquhart writes:"Overall, individuals do better things for the economy and their neighbors than government does. Individuals create jobs, buy things, pay bills, and invest. By taking more from our citizens, we stifle them and their families and, thereby, hurt our overall economy. We build more Government and undercut free enterprise.
If Utahns agree that they do better with their money than Government does, they better speak up. The tax spenders are out in force."
The conservative Republican "sound bites" may sound impressive to some but upon a closer examination the above comments are both deceptive and disingenuous.
For example, if the "government" were to grow by adding teachers to Utah's schools and reduce the largest class sizes in the nation, there would be more jobs created, more wage earners to buy things and invest, more sales and income taxes collected etc. Our children getting a better education would be an additional bonus.
You could make the same argument for growing "government" by providing more police officers and highway patrol troopers, more state social workers, more highway maintenance workers etc., etc.
The state's tax dollars in the above examples have the same beneficial effect upon the economy as the jobs created in the private sector with the added benefit of helping the states citizens at the same time.
There are many things the government does better with my fair share of tax money than I can. They do a lot better at filling pot holes, providing police and fire protection, educating children, providing health care for the indigent... The list goes on and on.
The suggestion that raising taxes nominally to funding education and health and human services at a reasonable level is "growing government" and hurting "free enterprise" is absurd. It is this type of rhetoric that becomes truly offensive when there are real people who are hurting because of the lack of state services available. Inevitably it is spoken by some well fed, well clothed, well educated, ideologue living in a nice home and in the best of health.
Maybe if a few of our pious conservative legislators would get out of their ivory towers and get into the trenches with those state workers providing food, shelter, and medical services for the homeless and mentally ill or spend some time in a hot overcrowded classroom with an underpaid teacher for a few days, they would see what "growing government" is really all about.
A good example of what happens by turning government services over to the private sector can be seen by the experience with Haliburton and Blackwater during the Iraq war.
Watch out, here comes Tax Em Stiff McIff.
There are people who remember and are grateful that you took a leading role in cutting the food tax a few years ago. It was the right thing to do then and is still the right thing. Utah's families are struggling and do not need new taxes.
Anon. 9:50,
"A good example of what happens by turning government services over to the private sector can be seen by the experience with Haliburton and Blackwater during the Iraq war."
In arguing that Government can do better things with people's money than they can, your examples of something horrible (Haliburton and Blackwater in Iraq) involve tax money and Government contracting. (Plus, you left out Bushitler.)
One thing people are not looking at is the role the Salt Lake United Way is playing in pushing this idea. The people who sold this idea to McIff all either work for the United Way or work for an agency that gets money to lobby from United Way. I am not sure people who give money to the United Way know that money is going to lobby for an increase on food taxes.
My libertarian spirit laments your position on grocery taxes. I'm no fan of a tax increase to reverse what you've done, but groceries should be taxed the same as everything else.
Government should be neutral in how it taxes. The purpose of taxes is to raise money for essential government services. Period. Stop the social engineering through taxes. In almost every part of the tax system, government picks winners and losers. Taxing food different than other items is just another step down that path of government control. In addition to adding yet another layer of complexity for those of us out here trying to comply with the nonsensical and unprincipled tax system you impose on us, in effect you are doing the same thing Obama is doing in controlling the economy. Although to a lesser degree, you are in principle doing the same thing Obama's doing - rather than allow individuals to make decisions in free markets, you use government to change incentive structures (in this case through taxes that favors some things over other things).
If as a legislature you insist on social engineering, at least do it every year when you spend the taxes, so that it's automatically reviewed every year and has to compete with everything else you do.
I think the more important question is not whether the government or the citizens should have the money.
The more relevant questions is: What would have been better:
1. The reduction in the grocery tax; or
2. A revenue-equal (much smaller) reduction in the overall sales tax rate.
(broader base, lower rate, etc.)
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