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Statement of support for tax reform proposal

October 23, 2019

The following is Sutherland Institute’s statement of support in concept of the tax reform proposal of the chairs of the Tax Restructuring and Equalization Task Force. Presented at the Oct. 22, 2019, meeting of the task force by Stan Rasmussen, Sutherland vice president of government affairs.

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I want first to express sincere appreciation for your diligent and effective efforts undertaken over this long, active interim and that you are continuing as you work to review and necessarily revise our state’s tax structure. 

We are supportive of the intent and many of the policy concepts included in the tax restructuring policy proposal put forward by the chairs of the task force.

Conceptually, it has the potential to stabilize general fund revenues and strengthen Utah’s economy by supporting families, while simultaneously reducing Utahns’ tax burden and setting the stage for improving income tax and transportation funding policy down the road.

We also recognize that you are still in the discussion/developmental process of what eventually will take the form of a bill or bills, and for this reason we encourage you to give thoughtful consideration to the implementation of the policy ideas in this proposal, should it move forward toward becoming draft legislation.

A policy concern for us – and we are confident a concern for you and all others involved in this process – is: What will be the impact on a family’s day-to-day financial life, in both the short term and the long term? In Sutherland’s view, for reasons already stated, the long-term impacts of the chairs’ proposal are positive for families. In the short term, there is less certainty because the details of implementation have not yet been decided.

For example, some families could potentially experience higher immediate expansion in costs from the increase on the sales tax on food and other services than the immediate gain they experience from a lower income tax rate. The greatest risk of this occurs under a scenario where the full tax policy changes get implemented all at once, allowing little time or flexibility for a family to adjust to their new financial reality.

With this in mind, an incremental implementation of the changes seems to be merited – as a means of managing and thus diminishing possible negative impacts on family budgets.

Again, we are supportive of the intent and many of the policy concepts included in the tax restructuring policy proposal put forward by Senator Hillyard and Representative Gibson (linked here).

Thank you.

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