From Deseret News archives:

New analysis urged for tax reform plan

Published: Friday, Oct. 14, 2005 11:08 p.m. MDT
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New legislative analysis might solve the problems with Gov. Jon Huntsman Jr.'s income tax reform plan, an influential state senator says.

Simply including more accurate state income tax projections — reflecting the burgeoning personal income growth in Utah — the governor could lift the cap of five personal exemptions and restore the deduction for home mortgage interest, said Sen. Curt Bramble, R-Provo.

"The closer we can come to no real winners or losers, the less likely there will be opposition," said Bramble, the co-chairman of the state's Tax Reform Task Force.

Bramble, a certified public accountant, says by using income projections for 2007, the governor could keep a 5 percent basic tax rate, give an exemption for every minor child and a deduction for mortgage interest.

Huntsman's tax experts used actual income tax returns from 2003 to formulate his plan. The projections used by legislative staff reflect what would be expected to be collected the first year that changes to the tax system would take effect.

Even better for conservatives, while Huntsman's plan would amount to a $10 million to $14 million overall tax cut, Bramble said the new numbers would give at least a $23 million income tax cut.

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If no tax cut is wanted, then the senator said the tax rate would only increase to 5.05 percent from 5.0 percent.

Huntsman spokeswoman Tammy Kikuchi said that Huntsman and his advisers have not seen the new numbers or analysis.

"The governor does want to hold to the 5 percent" rate on personal income taxes, said Kikuchi, because lowering the current 7 percent top rate by 2 percentage points will stimulate economic development — one of Huntsman's main goals.

"We used real numbers on the 2003 returns," she added. While those are likely conservative numbers considering how much personal income has grown in Utah over the past two years, 2007 income projections are just that — projections.

"Still, maybe because of growth we may be able to consider every (deduction being included) without a big tax cut," she said. "But the governor wants to get input (on his plan as presented) from around the state, see any final analysis numbers and then move forward" in the 2006 Legislature with a tax reform debate.

Huntsman "always believed that the Legislature would be part of the tax reform solution, and he's happy to look at responsible proposals, which he considers (the new numbers) to be," Kikuchi said.

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