Tax reform may get reformed

Huntsman and advisers already talking about additional reform

Like the new "dual-track" income tax system just approved by lawmakers?

Don't get used to it.

Gov. Jon Huntsman Jr., his trusted advisers and leading tax-reform legislators were already talking Wednesday about additional tax reform and tax cuts measures for the 2007 Legislature.

The talk of further tweaks to the new "dual-track" income tax system that gives taxpayers the option of paying a flat rate comes just one day after Utah legislators adopted the tax alternative, and even before the governor's signature on the new law was dry.

"We have a framework for further improvements in tax reform," Huntsman told the Deseret Morning News shortly after the bill-signing ceremony, describing his goal next session as coming up with incentives to move more Utahns away from the current income tax system to his preferred "flatter, fairer" income tax.

Gubernatorial tax adviser Keith Prescott told lawmakers that he could present new income tax alternatives as soon as mid-October.

Prescott, a private sector certified public accountant, and Huntsman chief of staff Neil Ashdown, an economist, appeared before the Revenue and Tax Interim Study Committee meeting as unannounced guests.

"We're moving forward. There is more comprehensive (tax reform) to come," said Ashdown.

Huntsman said later in an interview that he wasn't ready to say how that should be done.

"I'm not willing the day we actually sign this bill to make any predictions other than to say our objectives are really twofold — one is to over time get it closer to 5 percent (in the flat-rate tax option) and, two, to improve overall migration patterns to the flatter tax," the governor said.

One option the governor said is being considered for the 2007 Legislature is some kind of tax credit "for people at certain income levels that will encourage them to migrate over to a flatter system."

Plus, Huntsman said whatever he proposes will have to be based on how much money is available.

The tax reform/tax cut package approved by lawmakers in special session Tuesday carried a $78 million price tag.

Will he want to spend that much next session? "The numbers will determine that," the governor said, describing the latest revenue forecasts as "looking good. I think we will have a very strong year."

But Prescott, for political and practical reasons, warns against a "Band-Aid on Band-Aid approach" — offering instead one large leap forward.

Huntsman, though, told the newspaper that's not going to happen. "It's too complicated, with too many moving parts, to ever do in one fell swoop," the governor said. "I suspect we will continue to fine-tune the framework that has now been created over the next few years."

Comments