Utah 2019 Tax Referendum: The Winners and Losers
We the People who
exercised our right to veto a legislative action that vast majority of Utahns understood
to be ill conceived and to do more harm than good.
Thousands of citizen volunteers
who came together through social media, donated money to pay for the printing
of referendum packets, put political and other differences aside, stood
side-by-side for hours witnessing signatures and gave up their holidays in
order to gather over 180,000 signatures in record time.
Civility and mutual
respect was given a huge boost by the referendum which brought Utahns
across the political spectrum together in a common cause. By working together, Utahns
learned that there is much more that unites us than divides us.
This is just a sample of the Winners and Losers. For the entire list, click here.
LaVarr Webb and
UtahPolicy.com have a “deplorable” moment
LaVarr Webb, the publisher of UtahPolicy.com, had a “deplorable”
moment when he accused a broad
cross-section of Utahns of joining the “fringe groups” that are attempting
to repeal the Herbert administration’s and Utah legislature’s tax reform
package. If those collecting signatures succeed, Webb can only thank himself
for motivating the “fringes” to overcome seemingly insurmountable odds. Click here to read the entire article.
Do Utah’s real estate professionals really support food, gasoline and
property tax increases? Why don’t you ask them?
The Utah Association of Realtors (Realtors) provided key
support for Utah’s so-called tax reform legislation that was passed during a
special session of the legislature just days before Christmas. This column
provides background on Realtor activities and concludes with a series of
questions for real estate professionals. Click here to read the entire article.
Questions that legislators were asked to address before voting on tax
1. Why isn’t the effective date of for the income tax cut
December 31, 2019 so the new 4.66% rate applies to 2019 income returns? Why
should Utahn’s pay sharply higher income taxes again in 2019 after already
being hit hard in 2018?
2. Since the proposed bill doesn’t affect 2019 income tax
payments, is it really necessary to pass it in a special session? Or is this
being done to generate additional general fund revenue by taxing food and gas
as early as possible in 2020?
3. Since you didn’t restore the dependent exemption in 2018
like Idaho did, some Utah families will have paid in excess of $2,000 in additional
income taxes by the time the proposed tax cut takes effect. How many years will
it take for those families to recover $2,000 under this proposed tax reduction?
Is this a tax cut or is it simply returning some of their own money to them?
Why didn't you take care of the exemption issue in 2018 when Representative
Quinn tried to get
you to do it?
4. Why do most Social Security recipients continue to pay
taxes on their Social Security benefits under this bill? Is it because you
agree with a member of the task force who said that individuals with investment
income—such as IRAs—don’t need their Social Security and can afford to pay
state income tax on it?
5. Why are you requiring elderly widows and widowers to pay
higher taxes under this bill—single filers pay more?
6. Were remote sales tax collections included in the calculations
used to determine the overall tax savings that individuals will realize if this
bill is passed? If not, doesn’t that
reduce the amount of the tax cut from $160 million to a significantly lower number?
7. Why aren’t you including the impact of Senator Millner’s planned
automatic property tax increases in the analysis of this tax reform’s impact? Automatic
property tax increases will more than offset the tax cuts in this bill in just
several years while destroying the truth-in-taxation process.
8. Why are you increasing the state’s gas tax by roughly 40%
(10 – 15 cents per gallon based on price) when just a year ago, your constituents
voted 65% to 35% against a 33% per gallon increase? And why are you imposing
the gas sales tax all at once when you phase in the flat rate 10 cent per
gallon diesel tax increase over three years? Is this because you treat businesses
with high paid lobbyists better than the average citizen? Finally, why do rural
legislators support this gas tax increase given the long distances their
constituents have to drive?
9. Why aren’t you repealing any of the half-billion dollars
in sales tax exemptions granted to big businesses? Doesn’t this loss in sales
tax revenue have to be made up for by requiring low and middle income Utahns to
pay sales taxes on food and gasoline?
10. Why are you increasing the sales tax on food and
gasoline at the same time Republican members
on the Public Utilities Interim Committee passed a bill that removes
the sales tax from oil and gas extraction operations, electrical generation and
transmission facilities and pipelines with a loss of $48 million in
state sales tax revenue per year when fully implemented?
11. Why are you only adding the sales tax to shipping and
handling on taxable sales? Is this because big businesses purchase items
sales tax free and won’t pay this tax?
12. If the state needs sales tax revenue so badly, why don’t
the governor and legislators set the example and pay sales taxes on their
13. Why wasn’t any consideration given to controlling state
spending which has increased by 146% during the past 20 years while median
household income only increased by 67%? Is there anything in this bill that
will even slightly slow the growth of state spending?
14. Why are you adding a sales tax to identity theft
protection? This protection is required because the state facilitates identity
theft by selling, sharing
and allowing data breaches that compromise its citizens’ personal identifying information.
15. Why were $150,000
of taxpayer funds used to create a propaganda campaign designed to gain
support for tax reform in apparent violation of state procurement laws and
without a specific appropriation of funds?
16. Do you agree with the member of the task force who said,
in effect, that citizens are a “reservoir of funds” for government to tap?
17. Do you agree with the task force member who said that higher
property taxes increase property values?
RESPONSE TO REPRESENTATIVE STEVE HANDY WHO
SAYS HOW WONDERFUL THE TAX REFORM PROPOSAL IS.
must be reading a different bill than I am. The one I am looking at imposes a
4.85% sales tax on gasoline (10 cents a gallon at today’s prices) despite a 65%
to 35% vote by the public against a 10 cent per gallon increase in 2018. That
is on top of annual gas tax increases based on the three year rolling average.
(The gas tax is already scheduled to go from 30 cents per gallon to 31.1 cents
on 1/1/2020.) With the sales tax added, that will make it 41.1 cents and
as gas prices go up there will be two automatic increases – the rolling average
and the amount paid in sales tax.
tax hits low income individuals the hardest since they tend to drive older, gas
guzzlers and generally have longer commutes than do the more well to do with
their new, fuel efficient vehicles.
bill continues the massive sales tax exemptions given to big businesses that
employ powerful lobbyist. When these goods are sold out of state Utah collects
zero sales tax and no corporate income tax on them so the rest of us have to
make this up. Why is the state socializing business costs while privatizing
average single individual and or couple actually sees a small tax increase—not
a tax reduction according to information presented to the Task Force.
Singles and couples tend to be those least likely to be able to afford this –
young people just starting out or seniors on fixed incomes. The average
couple has to make $163,000 before they see a tax reduction.
bill discriminates against blue collar workers. The professions continue
to be exempt from sales taxes on services (lawyers, financial advisors, medical
professionals, etc.). On the other hand, house painters, landscapers, cleaning
services, plumbers, electricians, HVAC technicians, car washes including
interior cleaning, etc. all will have to add sales taxes to their bills. The
proposed legislation even taxes shipping and handling on taxable sales. And
while the state is collecting $1,050 by selling voters personal information
which facilitates identity theft, the bill imposes a sales tax on identity
theft protection services so the state makes money coming and going.
that’s just the tip of the iceberg.
an idea, how about putting a sales tax on campaign contributions? Had the
campaign contributions of just those on the Task Force been taxed over the
years that would have brought in $150,000 in sales tax revenue.
not legalize and tax online gambling since that is a $300 billion per year
business and Utahns are already betting on sports? Or why not implement
the Powerball and Megamillion dollar lotteries like Idaho and Wyoming do?
TAX RESTRUCTURING AND EQUALIZATION TASK FORCE
TARGETS THE WEAKEST
important to remember that the Tax Restructuring and Equalization Task Force
has members from both houses of the legislature and the Governor’s office.
Nothing is done unless it is approved by the Herbert/Cox administration.
on the November 7 meeting of the Task Force, it appears that Utah’s legislative
and executive branches are acting like a pack of coyotes stalking a herd of
sheep. Like the coyotes they are going after the weakest members of the herd
first—the young, the old, the tired—while leaving the strong ones alone.
why the current bill requires small businesses and blue collar workers—house
painters, landscapers, cleaning services, plumbers, electricians, HVAC
technicians, car washes including interior cleaning, etc—to collect sales taxes
on their services. After all, these folks are so busy trying to keep their
heads above water that they don’t have the strength to fight off the
legislative and gubernatorial coyotes
bill also goes after the poor, the young and the elderly by stacking more sales
taxes on the things they buy including food and gasoline. The average single
individual or couple actually sees a small tax increase according to
information presented to the Task Force. In fact, the average elderly couple
has to make $163,000 before they get a tax reduction.
legislative and gubernatorial coyotes have left the strong corporate
capitalists, the rich, and the white collar professionals who have high powered
lobbyists and who provide politicians with millions of dollars in campaign
contributions alone because they are too strong to attack. In fact, they allow
them to maintain their hundreds of millions of dollars of tax exemptions and
fix it so they benefit most from corporate and individual income tax cuts.
looks like a lot of Utahns need some sheep dogs to protect them.
Voters say no to 33% gas tax increase. Tax Task Force says tough—you’re
going to pay it.
Ronald Mortensen, Ph.D, Co-Founder CitizensForTaxFairness.org
On November 6, 2018, Utah voters resoundingly said No!
when asked if they would support a 10 cent per gallon increase in the gas tax—65%
No (689,254 votes), 35% Yes (363,878 votes).
So, what does the Tax Restructuring and Equalization Task Force do? They
ignore the vote of the citizens and include a “temporary” 4.85% state sales tax
on a gallon of gasoline in their tax reform proposal.
Continue reading by clicking here.
Heard at the Tax
Restructuring and Equalization Task Force meeting on October 22, 2019:
TASK FORCE MEMBERS:
Those paying income taxes are a “reservoir of funds that is available
to us.” The tax rate can be adjusted [to tap the reservoir] based on the
state’s needs for revenue.
The property tax is a “benefit tax.” It adds value to the
Infrastructure such as roads and highways should be funded
by property taxes but water infrastructure should be funded by user fees.
People can be land rich and cash poor. These people
shouldn’t be forced to sell their property in order to pay the taxes. If people
are land rich and cash poor they need to develop their property. If they don’t
develop it, they should sell it.
“I didn’t hear anyone on this committee address cutting state
spending or even slowing the growth of state spending.” (Ron Mortensen)
I am a taxpayer and object to being considered a reservoir
of funds available to the state. (Ron
How about imposing a sales tax on campaign
contributions? If that had been in
place, members of this committee would have paid $170,000 in sales taxes. (Ron Mortensen) To read more, click here.
Utah tax reform – grow government; socialize
business costs while privatizing profits; soak the middle class
Mortensen, Ph.D., Co-Founder CitizensForTaxFairness.org
This is the first in a series of
commentaries on the proposals put forth by the Utah Tax Restructuring and
Equalization Task Force. It provides a high level overview of the tax reform
proposals. Future articles will look as
From the perspective of a
taxpayer without high paid lobbyists or political clout, the legislature and
governor’s proposed tax reform looks like an overly complex exercise designed
to guarantee continued explosive growth in state spending while promoting
corporate socialism primarily paid for by middle-income taxpayers. Five major
things jump out of the Task Force’s draft proposals. Click here to
read the entire article.
Utah tax reform: Create a crisis and sell it to the public
Ronald Mortensen, Ph.D.
July 29, 2019
governor and Republican legislators created a funding imbalance by driving up
income tax collections while suppressing sales tax collections.
packaged this as a crisis in order to convince Utahns that the state has to
find new things to tax.
end-game is for the governor to call a special session and for legislators to enact
taxes on more things with the incidence of those taxes falling primarily on low
and middle-income Utahns and on small businesses.
voting for the bill will be rewarded with large campaign contributions from big
businesses and by the uber-rich since they will benefit the most from it.
take action to stop this, they will soon be paying more taxes in order to fund
even more state spending, to further socialize big business costs and to reduce
income taxes paid by the uber-rich.
Click here to read the entire article.
Tax Reform Task Force Meeting – Layton
Ronald Mortensen, CitizensForTaxFairness.org
Utah’s Republican governors and legislators have a
tax and spending problem.
During the past 20
years, population increased by 45% and inflation by 44%. However, the state budget, exclusive of
federal funds, increased by 146%. Add in
federal funds and it’s up 160%.
So state spending
increased 3 times faster than population growth, 60% faster than population and
inflation combined and roughly 2.6 times faster than median income which
increased by 55%.
Utah has a sales tax exemption problem.
to certain privileged, big businesses allow them to socialize their costs and privatize their profits by avoiding all
sales and corporate income tax payments.
For example, a
privileged Utah company that manufactures Wigits pays no sales tax on business
Thus, during the
production process no sales tax is collected on any of the say, $500,000 in inputs.
And when the
completed the Wigit is sold out of state for $1,000,000 no Utah state sales tax
is collected—a loss of over $60,000 in sales tax revenue.
privileged business pays no income tax on revenue from the Wigits sold
Therefore, low and
middle-income earners along with small businesses are left to make up the tax
If you are determined to modernize the tax structure, then
do something more than just rearranging the chairs on the Titanic.
Implement the PowerBall and
MegaMillion Lotteries so Utahns can buy lottery tickets without driving to
Idaho or Wyoming.
In addition to the
revenue from ticket sales, a one billion dollar Utah winner would pay the state
50 million dollars in additional income tax.
Consider legalizing and taxing online sports betting – a $300 billion business and Utahns already bet on
Require candidates for political office to pay a sales tax
on all campaign donations that they take in. The 2018, 4th
Congressional District race would have brought in roughly $550,000 in sales tax revenue
to the state ($9 million spent by both
candidates--$5,786,427 Love, $3,384,890 McAdams). The Salt Lake Mayoral race to date would have
brought in $60,000.