Free money? No
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No Comments [ Add Comment ]In his alt-country anthem about grifters and greed, singer-songwriter Todd Snider might as well be singing about Americans in general, and in 2008 specifically: "He got that easy money / It's sad but it's true / Everybody wants the most they can possible get / For the least they can possibly do / He thinks it's easy money / I don't understand / You scheme and you plan / You ain't got your hands on no easy money."
That's the song that came to mind while we were contemplating the $168 billion federal economic stimulus package and its previously unmentioned effect on Utah's state budget. Really, stick with us here: Utahns are looking forward to Uncle Sam's tax rebate checks for $600 per taxpaying adult ($1,200 per couple filing jointly) and $300 per dependent child. For many people, it'll be money they'll just turn around and spend -- thus, stimulating the economy in an effort to stave off recession.
But, like Snider's lyrics confirm, no matter how you stack it up that's "no easy money."
First off, it's a rebate that will count against whatever tax refund you might get next year; this is the federal government, people, so it's coming out of your hide one way or another.
And it will have a rather dramatic effect on Utah's bottom line. The stimulus package trims corporate income taxes and accelerates business' depreciation. That means the Beehive State can count on $65 million less in income tax revenue next year -- that's especially important, since Utah's entire income tax revenue is devoted, constitutionally, to funding public and higher education.
Now, that will be offset somewhat -- maybe $30 million -- by boosted sales tax revenue due to Utahns spending all those economic stimulus checks they start getting in the spring. Still, it'll be a net whack to the state's budget, even while we're buying new television monitors, iPods and tires with our tax rebate checks. We'll be spending now, and paying later.
Like the man sings: "You ain't got your hands on no easy money."
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