Utahns living at or near poverty levels suffer under a much heavier tax obligation than wealthier people, a situation which is worsening as inflation pushes more taxpayers into higher income brackets.

"There is a disproportionate burden in this state on low-income people," said Sarah Wilhelm, fiscal analysis director for Utah Issues, a poverty research group.

Wilhelm was one of a half-dozen speakers in a three-hour meeting of the Utah Legislature's Individual Income Tax and Corporate Franchise and Income Tax Task Force held Monday afternoon. For the most part, all of the speakers gave the task force a similar message: Low-income people are paying a higher share of taxes every year, despite having less of an ability to pay those taxes and still afford basic necessities.

Part of the problem lies in the lack of indexed tax brackets which would adjust income levels with inflation, meaning that as many as 85 percent of the state's taxpayers are in the highest bracket. Also, the lack of a state earned-income tax credit robs the lowest income earners of a chance to recoup their taxes, said Karen Crompton, executive director of Voices for Utah's Children.

The state would actually see significant benefits by paying the tax credit, since often times recipients will use the refund for "purposes we would consider smart expenditures," such as paying down debt or continuing education, Crompton said.

Also, it would provide one more impetus for those who no longer receive welfare but still live in poverty, she said.

"Over the past few years, the nation has worked to move people off of welfare," Crompton said. "Now, we need to work to get people out of poverty, and the earned income tax credit is an important tool for that."

The task force is charged with thoroughly analyzing the tax code and recommending changes to the Legislature. While the lower income earners need relief, cutting taxes is a challenging task in tight budget years, said Sen. Lyle Hillyard, R-Logan. Additionally, any reduction in the amount of income tax revenue would hurt schools, since all of the state's income tax finances education.

"If we want to make it more equitable, we would need to cut taxes for the lower-income taxpayer," he said. "But doing that would mean a reduction in state revenue unless we raised taxes for higher-income taxpayers."

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