Voters say no to 33% gas tax increase. Tax Task Force says tough—you’re going to pay it.
Ronald Mortensen, Ph.D, Co-Founder CitizensForTaxFairness.org
On November 6, 2018, Utah voters resoundingly said No!
when asked if they would support a 10 cent per gallon increase in the gas tax—65%
No (689,254 votes), 35% Yes (363,878 votes).
So, what does the Tax Restructuring and Equalization Task Force do? They
ignore the vote of the citizens and include a “temporary” 4.85% state sales tax
on a gallon of gasoline in their tax reform proposal.
A state sales tax on gasoline would raise the price of a
gallon of gas by 9.7 cents—based on the July wholesale price of $2.00 per
gallon in the Rocky Mountain Region. The total state sales tax on a gallon
of gas will go from 30 cents to
39.7 cents—a 33% tax increase and on January 1,2020 that will increase to 40.8
cents per gallon since the legislature has already built in an automatic
increase in the existing per gallon gas tax.
Legislators love the idea of a sales tax on gasoline since
as gas prices go up the state’s take on each gallon of gas sold automatically
increases. At a wholesale price of
$2.50, the state sales tax would bring in 12.1 cents per gallon, $3.00 14.5
cents, $3.50 17 cents per gallon, $4.00 19.4 cents per gallon. Therefore, before
you know it, the state sales tax on a gallon of gasoline will have increased by
A state sales tax on gasoline will hit lower income Utahns
the hardest since they drive older, much less fuel efficient cars and generally
commute further to work than do better off individuals. Rural Utahns, who routinely
drive long-distances, will also be disproportionally impacted by a sales tax on
gasoline. On the other hand, a state sales tax on motor fuel favors higher
income Utahns who drive electric, hybrid or newer, more fuel efficient vehicles.
As far as the sales tax on gasoline being a temporary tax, paraphrasing
Ronald Reagan, “Government taxes, once launched, never disappear. Actually, a
government tax is the nearest thing to eternal life we'll ever see on this
Furthermore, in keeping with its penchant for using the tax
code to reward Utah’s wealthiest citizens and to help big businesses socialize
their costs while privatizing their profits, aviation fuel will continue to be
taxed at between 2.5 cents per gallon and 9 cents per gallon. The 2.5 cents per
gallon rate on federally certificated
air carriers (SLC Airport) has been in place for 18 years but legislators
are in no hurry to increase that tax. The estimated value of the aviation tax
exemption is in the range of $180 million.
So, the Task Force is planning to ignore another vote of the
citizens by raising the state’s gas tax by 9.7 cents a gallon and it is
targeting those who can least afford the tax—low income and rural drivers. But
it is not touching the tax on aviation fuel which benefits the airline industry
and private aircraft owners.