From Deseret News archives:
R.I.P. for Utah flat-tax proposal?
Proponent says reform lacks task-force support
"This tax reform can't make it without the support of the task force leadership and it doesn't have it," said a disappointed Rep. Greg Hughes, who sits on the Tax Reform Task Force.
The Draper Republican expected the group to advance a 4 percent flat rate income tax when it met this week. But instead the task force put off discussions on the tax for at least a week.
Other flat-rate proponents may not be as pessimistic, conceded Hughes, who predicted the true flat-rate tax will linger for a few months before expiring.
Sen. Curt Bramble, R-Provo, says the flat-tax idea is not dead. He has arranged for many of the "stakeholders" charities, mortgage interest advocates, senior citizens and others to testify at a Thursday hearing of the Tax Reform Task Force.
A true flat tax has no deductions for historically cherished expenses like charitable giving, home mortgage interest and children.
The LDS Church last spring came out against repealing the current state income tax deduction for charitable giving.
But, Hughes and other flat-rate advocates say if the 2006 Legislature keeps the traditional personal income tax deductions and just adopts a one-rate-for-all system, the current top bracket of a 7 percent tax rate (in which nearly all Utahns fall) could be lowered only to 6.35 percent or 6.5 percent.
"It wouldn't be worthwhile to bother with it," Hughes has said.
Hughes does not lay the death of a true flat-rate tax at the feet of LDS Church leaders. A number of "stakeholders," including other charitable groups, have been lobbying legislators recently over keeping their deductions, he said.
"We want a full discussion, especially by some groups that have an interest in these deductions but who have not been heard before," said Bramble. It will be their chance, he said, to show their concerns, and tax force members chance to show them that even if they lose their specific deduction, income-tax payers who take their deductions will still be better off because of an overall lower tax rate.
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