From Deseret News archives:

Tax cut coming? Well, it is election year

Published: Thursday, April 20, 2006 11:35 p.m. MDT
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While someone making $500,000 a year certainly pays more money in state income taxes than does someone making $50,000, as a percent of their income the wealthy were paying a slightly lower rate in many cases.

Huntsman wants to go to what he calls a "fairer, flatter" income tax system, where the top rate is cut from 7 percent (which most Utahns pay now) to around 5 percent, for a one-rate system.

There are problems with the Huntsman plan. Senior citizens would see their retirement exemptions go away. You couldn't take a state income tax deduction for your kids' college investment program. Other current exemptions would also be lost.

But, argues Huntsman and those who support his plan, because of increased standard exemptions and family deductions, almost every Utahn would still see a tax cut. Even those few who had tax hikes would see increases of only $10 or $25 a year.

They argue that's a small price to pay for lowering the top rate from 7 percent to 5 percent, giving almost all Utahns a tax cut as well as making the state more attractive to big-business CEOs in hopes of attracting new firms here.

Taxes can be very complicated. Huntsman asks Utahns to visit his gubernatorial Web site, put in their own family's income on the tax calculator and find out for themselves how they would fare under his reform.

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But some legislators are saying they don't want to wait for further income tax debate next year, tax calculations or arguments. Give a $70 million personal income tax cut now — before the 2006 elections — they say. That would be something their voters could understand — and hopefully appreciate.

My guess is that Huntsman will not bend to legislative pressure. He won't go along with a simple income tax rate cut — for that would suck up all the money he needs for his "tax reform."

He may, if he can get support for his tax reform in the Utah House, still call a special session to ram his reforms through later this year. Otherwise, don't count on getting a state income tax cut this year.


Deseret Morning News political editor Bob Bernick Jr. may be reached by e-mail at bbjr@desnews.com

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