Some Salt Lake County residents are looking at the possibility of three different tax increases in the coming year — one from the county itself, one from Salt Lake City and one from the Salt Lake City School Board. Across the state, no less than 46 taxing entities had proposed raising their rates in advance of public hearings this week, some of them by staggering amounts. In Enoch, Santaquin, Farr West and Harrisville, for example, officials were trying to double the existing property taxes.
This is cause for serious concern.
Granted, many of these tax dollars are used for noble purposes, and government needs sufficient revenue in order to function properly. Yet taxing authorities often overlook the fact that they don't produce that revenue; they only collect it. Given the fragility of our current economic recovery, it doesn't seem wise to significantly expand the reach of the public sector when private businesses and individuals are the ones who have to foot the bill. In the private sector, enterprises with fewer resources strive to become innovative in doing more with less. In government, frugality seems to be a less attractive option than just raising tax rates.
Detroit provides an object lesson in how dangerous that idea can be. As the Motor City's tax base contracted, the city government refused to shrink in kind. The remaining residents were called upon to give a little more so that the government wouldn't have to change its status quo. The result was a rapid increase in the collapse of the economic infrastructure in both the private and public sector and the first declared bankruptcy of a major city in the United States.
Of course, Utah's cities are far from Detroit's situation, and many of the proposed tax increases are fairly modest, all things considered. But the sheer number of them taken together demonstrates that government, being insulated from the brutal realities of the free market, is the last to learn the hard economic lessons that the recession and weak recovery have taught the rest of the population. A family facing a budget shortfall can't simply raise its income by taking a vote.
Taxation may be a necessary evil, but it always serves as an economic disincentive, and now is not the time to plot 46 different ways that Utahns will have to make do with less in order for the government to breathe a little easier.