When the idea of lowering taxes creeps into our minds, most Americans rejoice; however, when taxes are raised, people tend to have a difficult time chewing it up, but what happens when a bill proposes both?
On Tuesday, February 22, a bill focused on lowering the state sales tax while increasing unprepared food tax passed the Utah Senate’s Taxation Committee 6-2. On the following Friday, the Utah Senate gave preliminary approval to SB270 with a 16-9 majority. Supporters of SB270 say that a sales tax decrease will help improve the economy in Utah, while the opposition insist that the food tax increase will strain middle and lower class families.
The purpose of bill SB270 is to raise the unprepared food tax from, what is currently 1.7 percent to 4.4 percent, while lowering sales tax from 4.7 to 4.4 percent. According to Sen. Stuart Adams R-Draper, the bill’s main sponsor, this new tax policy will lower the overall tax rates creating neutral revenue for Utah. He explains that it will make Utah more competitive on Internet sales as well as out of state sales which he hopes will improve the economy. This bill, however, undoes what some Utah legislators have been trying to do for years, that is, eliminating the food tax completely.
It was three years ago that John Huntsman Jr. strongly advocated against the taxation of food in general, arguing that it isn’t right to tax something we rely on for survival. During that time, Huntsman successfully issued a bill that lowered unprepared food taxes to a comfortable 1.7 percent, and it has been that way since.
However, due to the economic downturn, Utah legislators have been forced to look at many possible remedies to the state’s financial problems. Some proposals focus on cutting public education expenses, others deal with cutting funds for public land maintenance. However, raising the unprepared food tax is an option that many Utah Legislators see as a viable one. The bill must pass a final vote by the Senate before it can move on to the House of Representatives.
Regarding the bill, Linda Hilton of the Coalition of Religious Communities said, “This is a sales tax increase. It will hit people who are at the lowest income and the people who are buying new furniture and Ferraris will get a tax break.” Many other people feel the same way.
Doug Hafen, a college student at Southern Utah University said, “Can’t they find other ways to increase revenue? I already loose a huge chunk of my paycheck to federal and state income taxes, why does the government need to tax us again at the grocery store?”
Rep. Kay McIff, R-Richfield and Sen. Ben McAdams, D-Salt Lake City, believe that there should be a tax credit given to lower class families to offset the tax increase. In fact, this is exactly what Kay McIff is proposing in HR282. However, Art Sutherland, also with the Coalition of Religious Communities, said, “This is the 21st-century equivalent of saying, ‘Let them eat cake.’ ” In other words, the upper class benefits, the lower class is taken care of, and the middle class has to eat it.
Good or bad, only time can tell what the implications of bill SB270 will be.