To balance the budget, let’s tax the poor more

He’s not just a state senator, he’s the president of the Utah Taxpayer’s Association, “your tax watchdog”. His own personal web site says,”Fighting to reduce your taxes, not add more!” (exclamation point is his)

But now Sen. Howard Stephenson, taxpaper advocate, is saying we need to increase the tax on food to the same rate people pay for boats and SUVs. He’d rather reduce the state income tax, which he says would be a real economic stimulus. Stimulus for whom? The thousands of Utahns who have lost their jobs? The tens of thousands of Utahns who live paycheck to paycheck? Or is it the buddies who hand out Jazz tickets and free dinners during the legislative session? Sure let’s drop the income tax on those who need it the least, and let’s make life even tougher by forcing lower income people to pay a disproportionate amount of their income on taxes.

Everyone eats, that means taxing food is the easy way out. It’s not the equitable solution, it’s just the easy one.

Okay, taxpayers of Dist. 11, I want you to remember this name the next time you see it on a ballot. This is your representative who thinks that adding the sales tax back onto food is a good way of bringing more money into state coffers:
Howard_Stephenson
Sen. Howard Stephenson, R-Draper

KSL:

“Without a doubt, our budget would not be as bad off as it is now had we reduced the income tax more and left the food sales tax intact,” Stephenson says.

He says the food tax is a more stable revenue source than the income tax; while incomes rise and fall with the economic times, everybody has to eat.

Stephenson and Senate Budget Chairman Lyle Hillyard, R-Logan, are now calling for the sales tax on unprepared food to be restored to the same rate as the general state sales tax: 4.70 percent.

The rate was ultimately reduced, in two separate moves in 2006 and 2007, to 1.75 percent–where it stands today.

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  1. #1 by Ronald D. Hunt on November 10, 2009 - 11:55 pm

    I have heard a lot about this idea from a number of people. The sad thing is the utter lack of outrage at this idea.

    I am surprised they didn’t use this opportunity to complain about the national parks preventing revenue from coal mining filling the state coffers instead of tax’s. Have they finely given up whining about this?

  2. #2 by Richard Warnick on November 11, 2009 - 6:22 am

    Seems like every time we hear from Stephenson, he wants to raise our taxes. I grew up in New York, where there’s no sales tax on food and it’s never even been proposed. I never understood the reason why Utah charges a tax on food– surely it’s not to discourage large families!

  3. #3 by Rocky on November 11, 2009 - 8:40 am

    I say we pass a law that prevents fat, happy mormon fucks like the one pictured in the top post from being Utah legislators.

  4. #4 by Uncle Rico on November 11, 2009 - 10:03 am

    I’m in favor of taxing certain foods at the same rate we tax beer, wine, booze and cigs. Lets start with greasy, fatty fast food then move onto sugary, obesity-causing junk food. Too effing bad if that what the poor and those with large broods feast upon. That’s what they get for being poor and fertile. Lets also tax the bejesus out of artery clogging, colon blocking, heart attack causing, carcinogenic red meats. While we’re at it, lets create state run stores for some of these unhealthly foods. We could have the State Meat Store for example which would have a monopoly on the meat trade. After consultation with, and approval by, the requisite ecclesiastical authorities, the stores could be strategically located for maximum inconvenience with hours to compound the difficulty of procuring the sinful commodities sold within. To dissuade carnivores from their unhealthy and morally repugnant habits, the stores could charge about 250% higher than a butcher across the Wyoming state line would charge for the same product. And of course, everything would need to sold in a frozen solid state to insure that you couldn’t go right home and slap your purchase on the grill. What say ye? Lets do it!

  5. #5 by James Farmer on November 11, 2009 - 1:48 pm

    I agree with Rico.

  6. #6 by Mussolyon on November 11, 2009 - 9:49 pm

    I know audience, it is hard to believe, but as early as it is the clowns have rallied out in the Obama circus. We’re to tax Mac’s and what not, ever see what our kids eat in the Federal lunch program? Which is no problem, kids need fat and amino acids to form their skulls full of mush. We’re all here aren’t we? I ate my share of mac and cheese, pizza, and the like.

    Try to enforce it, the 2nd will save the 2nd helping. Bad idea to mess with food. The tax on food is regressive in Utah, but as a complete no load state, something has to give. Guess the folks of any means prefer to plant it on the absolute poor. That’s Spewtah. What can be said? We laugh in your general direction.

    No use laughing at animals, the real humor is in hapless progressives there. The outrage, the humoring of it by local stooges, the political culture that buys it, f’in hilarious. As much fun as a DI outing.

    Question: I know James makes a very decent salary as an engineer and lawyer, should we tax him to death, same with Cliff, he must have a pile of money from his Chinese exploitation days? Who knows what his compensation is now?… but like the administration, we would hope they would honor the Pledge to be transparent in ones dealings, as would be consistent with the example set by our Commander in Thief, our President, and somewhat rare change of underwear, beer rack, hose-in, yo anus.

    Can you pay individual poor families food sales tax with the largess you clearly have if the worst occurs? As it is, the existing tax is so regressive, are you personally mitigating that now? We would all be so proud if you were.

    In the case of a terrible republican scourge fleecing the Land of Zion further, would you volunteer to pay this punitive tax upon the least deserving? Even if they are 35 pounds overweight. Love you guys, and know you have it in you, cheers;
    Mussolyon

  7. #7 by brewski on November 12, 2009 - 8:57 pm

    Becky,
    I coundn’t agree with you more. I mean, it’s almost as dumb as paying for healthcare by taxing labor, taxing medical devices, taxing investment, cutting seniors’ benefits and making damn sure it all takes place after the next presidential election. I mean, who would do something as obviously stupid and manipulative as that?

    Oops.

  8. #8 by Becky Stauffer on November 12, 2009 - 9:12 pm

    Brewski, I shouldn’t have to explain. Utah is in a budget crunch and they either need to cut costs or raise taxes. It’s just lazy and cruel to add the food tax back as it disproportionately hurts those in the lowest income brackets. How do you defend that?

    You and I won’t notice it. Lucky us.

  9. #9 by brewski on November 12, 2009 - 9:16 pm

    I didn’t defend that. I said it was indeed stupid. It is very stupid, I agree.

    My point was that we do lots of incredibly stupid things, including the design (not the intent) of the proposed health care plan.

  10. #10 by Becky Stauffer on November 12, 2009 - 9:20 pm

    Wait, that’s a different thread. This one is on overtaxing the poor. I won’t be derailed! :)

  11. #11 by Dwight Sheldon Adams on November 12, 2009 - 10:48 pm

    . . .beer rack, hose-in, yo anus.

    That wasn’t even a particularly clever, cogent, or coherent ad-hominem pun.

    Something I learned from my D&D days: never jump over a flaming troll. That’s all the hoops you’re gonna get, jester. Get lost.

    Dwight Sheldon Adams

  12. #12 by brewski on November 13, 2009 - 3:13 am

    Becky, it is interesting that in liberal Europe, they have many very regressive taxes such as the VAT, huge gasoline taxes, electricity taxes, TV tax, etc.

    Also, the US income tax system is much more progressive than most of the world’s. Generally other countries don’t have the huge set of personal exemptions for each household member plus the standard deduction before you even start paying any tax.

    So believe it or not, our tax system, even with the evil Bush tax cuts for the evil wealthy, is far more progressive than France, Germany, Scandanavia, etc.

  13. #13 by Uncle Rico on November 13, 2009 - 7:57 am

    Not to hijack your thread Becky, but more on Howard Stephenson. Wow, just wow.

  14. #14 by James farmer on November 13, 2009 - 10:45 am

    U. Rico:

    Un-flipping believable!!! Wow!! Just, wow!!!

    But, then again, we are talking about Utah legislative wingnuts who cannot help but do their absolute best to out wingnut their own wingnut contemporaries!

  15. #15 by Becky Stauffer on November 13, 2009 - 1:27 pm

    Wow! is right. So demonized has the word ‘liberal’ become, that wacko right-wingers choke on it when forced to utter it.

    Brewski, I don’t consider the rich evil. I just don’t understand why they should get better tax breaks. What is a very tiny thing to the rich can be the difference of eating or not to the poor. Increasing the food tax to balance Utah’s budget is wrong. Period.

  16. #16 by brewski on November 14, 2009 - 8:29 am

    Becky, which tax breaks do the rich get which are unavailable to the poor? In general, poor people don’t pay any income taxes at all because they are below even the lowest tax bracket after the personal expetions and standard deduction.

  17. #17 by Richard Warnick on November 14, 2009 - 10:21 am

    brewski–

    You ought to be ashamed of yourself, repeating the tired “poor people don’t pay income taxes” line. If you look at total tax burden, low-income people pay a far higher percentage of their earnings in taxes than anyone else.

    Rich people can benefit more from the low rate on capital gains and dividends, currently taxed at 15 percent.

    Rich people benefit more from the mortgage interest and real-estate tax deductions on a first and second home. (Of course you’re not REALLY rich until you can’t remember how many houses you have, like John McCain).

    Rich people benefit more from tax-free home price appreciation.

    In Utah, the Huntsman Tax lowered the top rate to 5 percent and did away with many exemptions, resulting in a shift of the tax burden, raising taxes for the middle class by 25 percent.

  18. #18 by Cliff Lyon on November 14, 2009 - 12:07 pm

    Brewski, I need to second Richard’s admonishment of you.

    You’re either trying to pick a fight, or you have no idea what you are talking about.

  19. #19 by James Farmer on November 14, 2009 - 5:59 pm

    Unfortunately, I suspect it is the latter … brewski has absolutely no idea what he is talking about … he is just repeating old and tired talking points that have no basis in reality.

  20. #20 by brewski on November 14, 2009 - 8:52 pm

    You people should be embarrassed for your venomous ingorance.

    In 2009 the standard deduction is $11,340.
    In 2009 the personal exeption is $3,650.
    Ergo, a family of four would pay ZERO income tax at on their first 11,340 + (4 x 3,650) = $25,940 of income.

    Zero income tax means zero, nada, zip.

    In addition, this family of four could receive an Earned Income Tax Credit up to $5,028 which would offset their payroll taxes.

  21. #21 by Becky Stauffer on November 14, 2009 - 9:06 pm

    Brewski,

    Thank you for pointing out that the poorest of the poor would not benefit from Stephenson’s hope to decrease income taxes. Only those who actually pay income taxes will benefit. And who will that be, Brewski? It seems the poor would get a double whammy from Stephenson: Lose one-twentieth of their grocery money, and gain no benefit from income tax breaks.

    And you are forgetting the working poor, Brewski. Families who have jobs and kids, and manage somehow to pay the bills, but it is always a struggle. These people do pay income tax and get very few breaks because they make too much for earned income credit, but not enough for the rich man’s breaks. Losing one-twentieth of their grocery money is a meaningful amount. Maybe every 20 days they could have a no-food day to compensate. You know, just skip eating one day out of 20.

    As I said before, Brewski, you and I won’t be skipping any meals, will we?

  22. #22 by brewski on November 14, 2009 - 10:12 pm

    I think I have said three times now that taxing food is pretty stupid.

    We do a lot of stupid things. We subsidize junk food but not healthy food.

    We are about to impose a tax on insulin pumps and pacemankers.

    You will never catch me saying that our tax doesn’t isn’t awful. But the reasons it is awful is not that we don’t have higher marginal tax rates. We already have higher marginal tax rates than most of the OECD.

    I will say that we tax the wrong things (work, savings) and we don’t tax things we should (pollution).

    I have previously gone into long explanations on this topic, which seems to have fallen on deaf ears by some.

    And Becky, you have twice referred to rich man’s tax breaks which are not available to the tax-paying working poor. Can you give me some examples?

  23. #23 by Becky Stauffer on November 15, 2009 - 7:47 am

    Speaking of deaf ears, B. Just read upthread; Rich provided a brief list.

  24. #24 by Becky Stauffer on November 15, 2009 - 8:29 am

    By the way, Brewski, I do share your disgust with the tax code taken as a whole, both Federal and state. So much of it is a result of special interest influence. I think after health care and withdrawal from war zones, I would like to see our elected representatives address fixing tax codes of all types.

    However, the food tax is on the table right now and it’s important that we focus our attention and voices to ensure that one more mistake isn’t made. Join us in that, Brewski. We need to ensure that Sens. Stephenson, Hillyard and others do not make this terrible backward step.

  25. #25 by We wish. on November 15, 2009 - 9:02 am

    Everyone here can donate to their local food bank. If the baddies win and get a higher tax on food, you can take it upon yourselves to remedy the problem. Truth is Utah is such a total no load there really isn’t much meaningful money to be taken from the “rich” that will solve Utah’s woes. Price of being a no load, you just don’t have resources.

    I guess Utah is looking at that as a way to get a chunk of the the Federal Food Stamp money.

  26. #26 by We wish on November 15, 2009 - 10:11 am

    Brewski, What kind of howling do you think we’ll see when European style VAT taxes are dumped on the poor here? Canada is proposing a 12 % er. The HST, harmonized sales tax, that will be added to all retail, except food and baby clothes. Coffins and cremation as well, even the dead won’t get away clean.

    Food in Canada is already twice what it is here, and you must know that food in Utah is the cheapest of any place I travel to in the US by far. The only reason food is cheap is that it is part of the Mormon mission. Once Mormons were gone then you could see the like of those that populated Park City descend on the poor with a proper vengeance. Can we tax those crappy art sales up there?

    The sales tax on food is regressive, but the very least to be paid by a state that lives off the largess of others in the country. I don’t agree with it, but as we come to the reality of state fiscal collapse, more of this will be needed I fear. Failing the food tax, I propose then an increase in the state fuel tax, and property taxes, so as to hit the middle class hard. As the wealthy have the strings in their hands and won’t tax themselves, and no one can seem to make them, there is little else. This is probably because the wealthy are all safely elsewhere, at least financially.

    We could also petition the Feds to make 215 and corridor 15 between Logan and Provo a toll road for all vehicles over 3000 lbs. There is a job creating bureaucracy if we ever needed one. You should all pay something for that road in Utah, because you sure didn’t pay squat for that infrastructure others paid to have built for you.

  27. #27 by brewski on November 15, 2009 - 4:33 pm

    Becky, I think I am agreeing with you for the 4th time that I am with you on the food tax idea.

    I will offer my thoughts on Richard’s list:

    Capital Gains:
    It is a historical fact that when the capital gains tax rate is too high that the revenue collected from actual capital gains goes down. So while it might violate your sense of income redistribution, if you really want to generate revenue from capital gains taxes, then anything over 20% has been shown to be counter to your own goals.

    15% Tax on corporate dividends:
    As I have shown before in detailed calculations, the tax on dividends results in the double-taxation of corporate earnings, thus making the total tax rate on shareholders over 50%. None of the liberal democracies that you admire so much do this. So the 15% number is pretty much a lie.

    Mortgage Interest:
    This deduction is insane, especially on second homes. It never made sense. This is a good example of what scares me….trusting the clowns who gave us the mortgage interest deduction on second homes with designing a better health care system. Yikes!
    Having said that, for the very rich, the mortgage interest deduction is phased out at higher income levels, so in fact, they don’t get the deduction at all.

    Home price appreciation:
    You can thank Bill Clinton for this. He raised the exemption amount from taxation as part of his focus-group-tested targeted middle-class tax cut just before he ran for re-election. What a coincidence.

  28. #28 by Richard Warnick on November 15, 2009 - 5:03 pm

    Point of information, the home mortgage interest deduction is good for loans up to one million dollars. While you can say “the very rich” don’t benefit, the merely rich do.

  29. #29 by brewski on November 15, 2009 - 9:31 pm

    Point of information: All itemized deductions are limited for individuals with AGI in excess of $83,400 and married couples filing jointly at $166,800.

    Since Obama has defined rich as making over $250,000 per year, I will come to the objective conclusion that the home mortgage deduction is limited significantly for the over $250,000 cohort.

    This is by no means a defense of our tax code. Just trying to inject some facts into this conversation, which is always dangerous on this site.

  30. #30 by Dwight Sheldon Adams on November 19, 2009 - 12:36 pm

    This is a good example of what scares me….trusting the clowns who gave us the mortgage interest deduction on second homes with designing a better health care system.

    Point of fact: They’re not the same clowns. They’re whole new clowns. I feel the same way when a company fires one CEO and hires another, but surprise, surpise–sometimes the new CEO actually does a better job.

    Of course, I could opportunize a bit and take your argument another direction. After all, the guys in government are the same clowns who designed the Constitution, who fought to free the colonies, who fought both for and against slavery, who ordered the dropping of the A-bomb on Hiroshima, who regulated and de-regulated S&L, who used imminent domain to build the interstate highway complex and to bulldoze private homes to build a sports mall, and so on.

    Gosh! I don’t get it! How do the very same people do so much right and so much wrong?

    The distrust of government is tiring. It’s gonna be there. It’s gonna do stuff. You might as well stop whining. Sometimes it’s like you get on this site just to obtain an audience for your moaning.

    The bottom line is that you don’t really have a point. You can fight a good numbers argument, but what’s you’re ultimate conclusion? That people getting taxed upwards of 50% on their dividends should get paid even MORE for doing nothing? Remember–these are dividends, not earnings. The earning was done by the workers. We could tax them 90% and dividends would still be free money.

    Besides, you aren’t paying attention to the implications of your calculations. It’s so fun to be a family of 4 living off of $25,940/year, right? I know you know better than that. The exemptions and deductions exist largely because, considering the cruelty that families of 4 are actually expected to live on that kind of money (or less), it would be overbearing to expect them to pay taxes on top of being deprived. As with many other laws, tax code (at least in this instance) is designed in part to govern what our economy demands of people in relation to what we as a society can reasonably expect of them.

    So I can agree with you that, technically, the poor get more tax breaks. In practice, however, the poor can’t utilize the tax breaks that are available to them. Tax breaks on second homes are designed for the rich because, despite having all the forms available to them, the poor aren’t going to ever have reason to fill them out.

    These statistics are fascinating. Notice how the median income of the upper class increases significantly more than their median income. This indicates a dramatic increase in the wealth of a select few. Also, notice the growth of income in the bottom 90%. It is true, what Reaganomics says, about everyone becoming more wealthy if the wealthy become more wealthy. It is also true that the wealthy will increase their wealth more than the poor will–by quantity and percentage. Any tax breaks will necessarily reflect a greater quantity and percentage benefit to the rich than to the poor. Graduated taxes attempt to rectify that inequality.

    There’s a systemic problem in all of this, though: you can’t tax the rich. Any tax that increases costs on the rich will increase costs on everyone else. Without a change in our economic system and the degree of control the People have over it, the middle-class will provide the primary sacrifice from which taxes are gleaned, by their own taxes and the supllementing of the upper-class’s income to pay for theirs. You can’t tax the rich; it’s cruel to tax the poor; so take the middle ground, and everyone’s happy! I hope the middle-class figures out that they’ve been betrayed by the system just as much as the lower-class has sometime soon.

    (Note: Incidental taxes and tax burden dynamics are, of course, more complex than I have indicated; taxes are not ALWAYS passed on. By and large, however, they are, with the perceivable exception being when a business has been backed into a tax corner, so to speak. This, however, would likely only result in the business failing)

    Dwight Sheldon Adams

  31. #31 by Richard Warnick on November 19, 2009 - 1:04 pm

    I like Matt Yglesias’ explanation of the tax subsidies for rich homeowners:

    If you said “we should create a federal program to give gold bars to people who own homes, and people with higher incomes or more expensive houses will get more gold” everyone would regard that as completely insane. Instead we have a tax deduction.

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