Tax cuts are in the works

What kind of tax cuts will Utahns see this year?

While nothing has been taken off the table yet, GOP legislative leaders appear to be leaning toward cutting personal income taxes and taking more sales tax off food — just like they did last year.

The question remains, though, just how big the tax cut will be this year, when lawmakers have nearly $1.6 billion extra to spend. House Republicans say taxes should be cut $300 million, but Senate Republicans only want a $150 million tax cut.

Tuesday, a new proposal from Gov. Jon Huntsman Jr. surfaced that shows he's willing to go $10 million higher than the $100 million cut in personal income taxes that he called for last month in his $10.7 billion budget.

The governor's new plan is intended to encourage even more Utahns to choose the flat-tax option over the more complicated current system. But the new plan has a twist — even those paying a flat tax could take some deductions.

House Speaker Greg Curtis, R-Sandy, told his 55-member GOP caucus on Tuesday the he believes "we will have a combination" of reductions in the personal income tax and the sales tax on food.

Republican senators, as usual, closed their caucus Tuesday. But Senate Majority Leader Curt Bramble, R-Provo, said afterwards the Senate Republicans are looking at a similar package, along with some business tax credits.

Bramble said the caucus voted unanimously Tuesday to reaffirm their intent to keep the overall cut at $150 million and focus on income taxes, along with the business tax credits. They remain willing, he said, to consider taking so-called "boutique" taxes off food.

The Senate GOP caucus heard Huntsman's new tax-cutting plan Tuesday and liked it, Bramble said. "We're making progress," he said, with both the governor and the House. "The discussions are progressing better than they have in past years."

House Republicans have yet to be briefed on the governor's new plan. But Tuesday, the GOP House members were sticking by their guns of liking more sales tax reductions.

One idea floated just a few weeks ago is apparently dead. No one is pushing reducing the state-mandated basic school levy on property taxes. Removing that tax would be a $257 million tax cut, both to homeowners and businesses. But such a move would eliminate one of public education's most stable revenue sources.