All hands go up for tax cuts

All those who like tax cuts please raise your hands.

Even though about a third of Utah residents say they don't want tax cuts, a huge tax cut/tax reform bill passed unanimously by the Legislature Wednesday, the 2007 general session's final day. All legislators' hands were up for a $220 million tax reduction.

A few amendments toned up the large bill. And legislators said over the coming summer the state's tax policy may be "fine tuned," with even a special session coming to repeal the state's old tax systems.

"We have before us the proverbial sausage," joked Rep. Roz McGee, D-Salt Lake, just before the House voted 75-0 in favor of SB223, which imposes a new 5 percent single-rate personal income tax system, cuts the food sales tax, cuts the general state sales tax and trims back a dozen or so other specific taxes.

"This sausage is well-seasoned," McGee added, repeating the various studies over the last two years on tax reform. "There have been many good cooks."

Highlights of the recipe:

• All tax cuts take effect Jan. 1, 2008.

• 5 percent single-rate income tax system with credits, not deductions. Almost all Utahns get an income tax cut, but those making $250,000 to $600,000 may see tax hikes between $200 and $2,000.

• Uniform food sales tax of 3 percent across the state.

• Cut in food tax, cut in general state sales tax.

• Half a dozen other specific taxes cut.

• Food sales tax taken out of the so-called "boutique" sales tax.

All of the cuts were rolled into one omnibus bill as part of a compromise agreement between House and Senate GOP leaders. House Republicans, especially House Speaker Greg Curtis, R-Sandy, wanted cuts in the food tax, and Senate Republicans like Gov. Jon Huntsman Jr.'s income tax reform plan.

They all started with a different idea of how much should be cut — $300 million for the House GOP, $150 million for Senate Republicans and $100 million for the governor. It took many early morning, late night and weekend meetings to come up with the final package initially passed Monday by the Senate with only two Democrats opposed.

Wednesday, senators approved the amended bill with no negative votes, although three senators were off the floor, including Senate Assistant Minority Whip Ed Mayne, D-West Valley City, who'd opposed the bill before.

And Senate Minority Caucus Manager Pat Jones, D-Salt Lake, pointed out that the House amendments actually lowered the amount of money Utahns could earn before owing taxes, for example, from $14,000 to $12,000 for single filers.