Executive director of Governor’s Office of Management and Budget makes case for tax reform
February 25, 2019Tags: tax modernization, taxes
In a recent op-ed published on utahpolicy.com, Kristen Cox, executive director of the Governor’s Office of Management and Budget, made the case for reforming Utah’s tax structure to meet the demands of the future.
“If we don’t take corrective action,” Cox writes, “we will face a fiscal crisis where we will be unable to fund core government services like public safety, social services, and transportation in two to five years. It is not a matter of if it will happen, but when.”
Cox breaks down the problem of Utah’s narrowing sales tax base, which supports state government services besides education — from social services to public safety, to transportation and the court system — and illustrates that Utah’s tax structure must be changed to adapt to our modern service economy in order to avoid facing a fiscal cliff.
Reforming Utah’s tax structure also gives us an opportunity to lighten the burden on low-income households, by making state taxes more fair, and less regressive.
Currently, Cox writes, “Utah’s sales tax is regressive, meaning high-income households pay less in tax as a percentage of income than low-income households. Consumption patterns drive most of the regressivity, with lower-income households consuming much of their annual income to meet basic needs while higher-income households save more of their income having met basic needs. Broadening the tax base to include more services and lowering the overall sales tax rate reduces the regressivity and increases the overall fairness of the tax.”
Cox concludes by arguing that we should modernize our tax code now, while our economy is strong and we have the luxury of “preventing the problem rather than responding to it.”
You can read the full article here.