From Deseret News archives:

Food-tax refund on table

Panel ponders mailing a check or giving credit to low-income Utahns

Published: Saturday, Aug. 6, 2005 9:04 p.m. MDT
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Low-income Utahns may see a check in the mail or a credit on their state income taxes, a way legislators could give them a break on the sales tax they pay on unprepared food.

Senate President John Valentine, R-Orem, says that while a few tax reform ideas seem to be losing speed in a state tax study committee, others are accelerating. And giving an income tax break to low-income Utahns for the sales tax on food is "gaining ground."

House Minority Leader Ralph Becker, D-Salt Lake, who sits on the Tax Reform Task Force along with Valentine and a dozen other lawmakers, said any idea to help low-income Utahns is welcomed.

"The greatest tax burden falls on a single-parent family that makes between $25,000 and $30,000 a year," various studies show, said Becker.

But while the sales tax on food is regressive and hits lower-income Utahns harder than it does wealthier citizens, giving an income tax refundable credit may not be the best way to lessen poor people's tax burdens, said Becker.

Valentine, R-Orem, a tax attorney, said that while the task force may not ultimately adopt some of the larger tax changes now being discussed — because while big, they are not the best ideas — the task force will have some significant recommendations by its November deadline.

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The food tax refund "could mean maybe $100 or $200 a year for larger families," said Valentine.

The credit would be a per-person allotment. A single low-income person may get just $25 or $30 a year. The more people in the family, the more money the family would get, he explained.

Sarah Wilhelm, fiscal analysis director for the advocacy group Utah Issues, has told the task force that poorer Utahns carry the greatest tax burden in Utah and need some special attention.

Speaking on the issue a year ago, she told the Deseret Morning News: "Even though across the board our tax burden is real high, it is even higher for the low-income category. It seems to me we should be thinking of ways to spread the burden out more equitably."

Depending on how you measure, Wilhelm said, the people trapped in the lowest income brackets pay, on average, 11.5 percent of their income toward local and state taxes, while those in the top 1 percent pay, on average, about 5.5 percent in state and local taxes.

"One of the biggest drivers of this battle over equity is the sales tax right now," she added. "Poor people have to spend everything they have on goods, while others are more likely to spend their money on services," most of which are untaxed.

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