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Friday, October 28, 2005

WSJ: Mormon Church Kills Flat Tax in Utah

Tax_news_roundup_17Wall Street Journal (Paul T. Mero): In Utah, the Flat Tax Doesn't Have a Prayer:

After nearly a year together, the Utah Legislature and Gov. Huntsman are in the midst of a potentially historic debate that, to date, has centered on the flat tax. It is no secret that a flat tax has tremendous appeal in conservative politics....And which state legislature is more conservative than Utah's? Slam dunk, right? Wrong....

Like the old E.F. Hutton ads, when the Mormon Church speaks, the state legislature listens. Frankly, Mormon elected officials worth their salt do not want to be at odds with the leaders of their church....

This held true for the flat tax. There was some quiet speculation about how the idea would sit with the Mormon Church due to its longstanding support of charitable deductions until Sept. 15. That's when the church reiterated its "support of retaining a state tax deduction for charitable giving." The meaning was crystal clear. With whiplash speed, the governor's office spoke of implementing a "flatter" tax, one that included a charitable deduction....

There will not be a pure flat tax in Utah. This is just the way it is. Mormon legislators understand, struggle and cope with this ever-present personal conflict in policy making.

The Mormon Church did not kill the flat tax in Utah. The church implicitly pointed to two underlying factors, always present but conveniently ignored, that doomed the proposal: First, a pure flat tax is inconsistent with the values and priorities of Utah. And second, a flat tax won't go to the root of the problem -- overspending....

Faith plays a unique role in the life and politics of this state -- and there just wouldn't be voter support, especially among conservatives, for a tax scheme that failed to support families and faith. Here in Utah, good public policy is more than efficient policy. Good public policy will actually reflect the values and priorities of the people it serves. And a flat tax with no deductions, exemptions or credits simply does not reflect the values and priorities of Utahans....

[T]he Mormon Church rightly understands that the tax code should be used to incentivize individual and societal behaviors that help us to be our better selves and, at the same time, serve to unburden our reliance on government programs. A proactive, not "neutral," tax policy does this. ...

[T]he tax code can be used to influence behavior and promote a definition of the common good that goes beyond simple pro-growth, efficient revenue generation.

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