From Deseret News archives:

House leaving Senate behind on tax reform

Published: Thursday, May 4, 2006 9:25 p.m. MDT
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Are the Republican leaders of the Utah House just excellent politicians, or are their Senate counterparts just kind of fumbling along?

Once again, House GOP leaders have outmaneuvered state Senate Republicans on a vital issue to voters during this election year — tax reform and tax cuts.

This past week the Deseret Morning News reported that there is a tax compromise in the works: Instead of just switching to a new personal income tax system with a rate of about 5 percent for all Utahns, residents could choose between the current 7 percent rate system with a bunch of exemptions or go to the new "fairer, flatter" 5 percent system with only a few deductions.

While there may be some confusion at the start-up of the two-system operation, in the end there would be no "losers," says House Speaker Greg Curtis, R-Sandy, because individuals and families could pick the system that gives them the best tax advantages.

Caught a bit off-guard (and not the first time in this ongoing tax debate), Senate GOP leaders immediately started talking about the problems with a bifurcated personal income tax system, not discussing any of its merits.

But politically speaking, the House has again roped in its Senate colleagues.

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Who can candidly, publicly argue against a "tax reform" movement that gives a $70 million tax cut to all residents and no one has to pay any higher taxes?

Almost always in so-called tax reform efforts, when all the complicated numbers are run, a few taxpayers see a tax shift. And quite naturally, those who may pay a bit more, who lose some long-held tax exemptions, complain.

When those tax shifts also take place in a legislative election year — all 75 House seats are up and 16 of 29 Senate seats are up — well, you get the political picture.

You may recall that during the 2006 Legislature that ended March 1, the 56 House Republicans had voted in caucus to give a $350 million tax cut this year.

GOP senators hemmed and hawed for weeks, then finally took a caucus vote to give a $100 million tax cut.

Republican Gov. Jon Huntsman Jr. originally suggested even a smaller tax cut than the GOP senators, but he also kept saying that the state could afford his H3 personal income tax reform and remove the state's portion of the sales tax from unprepared food — which would have cost around the $350 million figure.

In fact, Huntsman and House Republicans ended up on the same side on tax reform and other issues last session, as the senators continued to oppose removing all of the state sales tax from food.

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