Gov. Gary Herbert has proposed a reform package that would do some of this while also giving Utahns a $200 million cut in the overall sales tax the state collects — effectively giving back some of the state’s projected $1.3 billion in surplus funds. He would lower the state’s portion of the sales tax from 4.7 percent to somewhere less than 3.9 percent.
Lawmakers might be able to do even better than that. A study last year by the nonpartisan Utah Foundation suggested the state could reduce the effective tax rate to 2.1 percent if it began taxing all personal consumption transactions. This would include parts of the service industry, such as haircuts, that currently are tax-exempt.
This isn’t just a question of good governance. It’s a fairness issue.
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