The WSJ Op-Ed page has a fascinating story today on the battle over the discussion of the flat tax in Utah. For those of you whose eyes glaze over at the discussion of taxes and economics, I promise this post will try to make that subject interesting. But this post will also discuss the WSJ’s attitude toward the Church and the Church’s influence on public policy-making.
First point: I hadn’t heard about this subject until I picked up the WSJ this morning. I’d be interested to hear input from people in Utah who have been following the flat tax debate. I’d also be interested in input from people with knowledge of economics and their opinions on the flat tax.
To summarize: the mostly conservative Utah legislature was considering a completely flat tax on state income. I presume this to mean that all income would be taxed at a flat rate, say, 1 or 2 percent, regardless of your income level. But to make a flat tax work, you must get rid of deductions, which include things like your mortgage interest, your property taxes and your charitable deductions.
Enter the Church. The Church made it clear that it is in favor of keeping charitable deductions. The article makes it appear that lawmakers immediately caved because 80 percent of the state legislators are members of the Church. The flat tax appears to be dead.
In the print version of the WSJ, there is a cartoon from the Salt Lake Tribune that speaks directly to the issue of Church influence in Utah state politics. There is a cartoon of the state legislature with legislators saying they are in favor of the flat tax (“Brilliant!”) until the Church says it is opposed, and then the legislators immediately kowtow to the Church position, changing in an instant to “Whose stupid idea was that?”
I think the issue is much more complex than that. The Church and almost all churches in the U.S. support the idea of deductions for charitable contributions. We as a society have historically supported this idea because churches perform an important societal function. Getting rid of deductions would set a dangerous precedent.
And, surprisingly, the WSJ article bends over backwards to support the Church viewpoint. Instead of joining the chorus of commentators anxious to criticize the Church, the article makes the point that: “While it might be easy to blame opposition to a pure flat tax on the voracious needs of special interests, the 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.” The article makes the point that the real problem is out-of-control state spending, not Church meddling.
I’m sure the world will be filled with snarkers laughing it up at the Church’s expense on this issue. But it is naive and laughable to suppose that the Church should stay silent on an issue this important. Deductions for charitable contributions are essential to the Church’s continued operations and have important public policy benefits. Why should the LDS Church or indeed any church in Utah not speak out on the issue?
It is worth pointing out that on a national level there is no thing as a completely flat tax. All of the major flat tax proposals have included continued deductions for mortgage interest and property taxes, for example, and some have included continued deductions for charitable contributions. A completely flat tax simply doesn’t have political support.