In an early morning committee meeting Sen. J. Stuart Adams, R-Layton presented his bill to increase the sales tax on food. He was careful not to say the words “tax increase” however, arguing the bill lowered the overall sales tax rate.
“This bill simply lowers the overall sales tax rate from 4.7 to 4.4 percent, it broadens the base,” Adams told the committee. Low-income advocates however lined up to remind the committee that lowering the overall rate of sales tax by increasing the food sales tax is still a tax increase. Steve Erickson, from the Crossroads Urban Center, argued that such rate adjustments “paved over the interests” of Utah’s low-income citizens.
Adams tersely responded that the rate adjustment was needed to stabilize the tax rate which fills the state’s general fund. “The state of Utah does not run on a three-legged stool, it runs on a one-legged stool—sales tax,” Adams argued. “It’s important that it be stabilized.”
Linda Hilton, Director of the Coalition of Religious Communities challenged the bill being revenue neutral. “This is a tax increase for low-income people,” Hilton told the committee. “It hits people where they live.”
In discussion from the committee, Sen. Ben McAdams, D-Salt Lake City echoed the comments of low-income advocates and argued that perhaps an earned income tax credit might help relieve some of the burden on low-income Utahns. “An earned-income tax credit is much more laser-like way to provide relief to low-income Utahns,” Adams said, otherwise he argued a higher sales tax rate could affect the amount of money that makes it into the general fund.
Erickson with the Crossroads Urban Center in a separate interview likes the idea of an earned-income tax credit, he also says it’s a bill him and his colleagues have been trying unsuccessfully to get passed in the Legislature since the ‘80s. “Trying to pass progressive tax policy is like spitting in the wind,” Erickson says. “I know because I’ve been doing it for years.”
He argues that even such a measure if passed would not help most working poor anyway, since earned-income tax credits would only aid parents with dependents and therefore would exclude low-income single adults and senior citizens. Ultimately, despite rhetoric of lowering rates and being revenue neutral, Erickson sees a very simple inequality in a bill that lowers general sales tax rates by increasing the sales food tax. “You’ll save more on buying your Ferrari than you will buying groceries,” he says.
The bill was passed favorably out of committee with 6 yes votes to 2 no votes.