Most in poll opposing state tax proposals

As a special legislative task force attempts to overhaul Utah's complex tax system, a new poll shows reform-minded Gov. Jon Huntsman Jr. and lawmakers could be hemmed in by large majorities of Utahns who don't want radical changes.

Utahns don't want sales taxes extended to services, especially not to health-care services, and they want sales tax removed from food, according to results from a new Deseret Morning News/KSL-TV poll by Dan Jones & Associates.

The survey results come in the wake of another daylong task force session Wednesday, during which lawmakers pleaded with citizens and influential groups to suggest specific tax changes they would like to see implemented next year.

But because a number of task force members want to keep any reform "revenue neutral" — not bringing government any more cash from citizens — various tax exemptions might have to be junked in order to lower tax rates, and sales taxes could also be extended to services as well as goods.

In fact, a step toward doing away with perhaps the most widely used income tax exemption was taken Wednesday by a task force subcommittee. It approved 5-1 a recommendation to lower the state income tax rate to 4 percent and to remove the deduction for charitable contributions.

Most Utahns want to retain the tax break, according to poll results released last week. And in a statement issued last month, The Church of Jesus Christ of Latter-Day Saints said that "for the overall good of the citizenry," tax deductions for charitable giving, including religious contributions, should be retained.

Subcommittee members were told prior to the vote that the amount of tax liability would not change significantly if the rate were dropped to 4 percent. Almost all Utahns fall into the highest (7 percent) income tax bracket.

The co-chairman of the task force, Sen. Curt Bramble, R-Provo, said that while the LDS Church's "input is appropriate as with any organization's input, there may be some difference in the level of influence" over what he described as an administrative rather than moral issue.

Bramble said further changes could be made to the proposed income tax rate before the task force issues its final recommendations. Those should come this fall, in time for review before the 2006 Legislature meets in January.

Taxing services is a likely linchpin to broadening the sales tax base, which Huntsman and other groups advocate. Taking the sales tax off of food might help poorer Utahns, but doing so could cut 10 percent or more of some cities' tax revenues, which municipalities foresee as a big problem.