Income-tax cut may not help middle-class Utahns

More than 80 percent of legislators are Mormon. Asked to comment on SB223, the public relations department for The Church of Jesus Christ of Latter-day Saints repeated its previous statement on the benefits of charitable giving, adding that no further clarifications would be coming.

The bill would give a $102 million tax cut in 2007, a $105 million tax cut in 2008.

Huntsman's recommended budget for next year contains just a $100 million tax cut. Senate Republicans are calling for a $150 million tax reduction, while House Republicans want a $300 million tax cut.

Those GOP lawmakers trying to support their governor say that next week's updated tax revenue forecasts will bring maybe $100 million more in tax growth.

That will allow other, non-income tax cuts to be considered. And perhaps large LDS families will come out better when those "targeted" tax cuts — yet to be decided — take place.

But others just say that SB223 moves in the wrong tax-reform direction — it is more complex and more unfair than other alternatives.

Spendlove countered the claim of complexity, saying that "three simple" mathematical computations can lead a tax filer to find out his tax under SB223.

Perhaps, but just explaining SB223 is difficult:

• The flat-rate income tax rate would be just 5 percent, competitive with the top rates in surrounding Western states.

• In 2007, a single person would get a $321 non-refundable tax credit. Likewise, married filing separately would each get a $321 credit. A single head of household would get a $471 credit. A married couple filing jointly would get a $642 credit.

• Or, each filer could take 6 percent of the federal standard or itemized deductions, whichever is a greater tax credit than those specific dollar amounts listed above.

• In addition, each filer gets a per-person nonrefundable personal exemption credit. That would be a per-person credit of $153 in 2007. For a married couple with two children at home, that would be $612.

• But, all these credits phase out as your income rises. For a family of four making $75,000 a year, the total credits equal $549 — and so your tax owed is reduced by that amount. And in 2007 that family would pay an income tax bill of $3,201, a handout accompanying SB223 shows.

Since lower-income Utahns would get the full, or the bulk, of tax credits, Sarah Wilhelm of Voices for Utah Children said her group supports SB223.

"It goes a long way in helping families just above the poverty line," she said. "Their tax burden would go down under this bill." Her group "would love to see this be a refundable credit" — where people with no income tax liability would actually get a check from the state.

"These families are still paying a large part of their incomes in other taxes" — like sales and property taxes, she said.

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