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Monday, February 27, 2006


By Curt Bramble
Senator, District 16: Provo

Over the next 10 to 20 years, Utah's income tax base will continue to shrink, severely under-funding education.

SB 242 passed the Senate Friday afternoon on a 21-4 vote. This proposal drops the income tax rate from 7 percent to under 5 percent and will ensure the economic stability of education and of the state.

There may be a few cases where taxpayers who receive an extraordinarily disproportionate benefit from deductions will pay more under tax reform. One example I recently ran across is a married couple making over $60K, with a series of deductions that allows them to pay no state taxes under the current system.

This reform bill is good tax policy. It will build the tax base and lower the rate while bringing equity back into our tax system. It provides credits for charitable contributions, homeowners, and mortgage interest. Plus it allows for a $100 per person credit to offset any tax you happen to find immoral. :-)

If this bill passes the House, Utah will move from having the 14th highest tax rate to the 14th lowest in the nation, making our state much more competitive.

It is important to recognize that this is true tax reform- not just a tax cut.

This tax reform proposal delivers sound tax policy and economic development.

It is flatter, simpler, and more fair.


Anonymous Jeff Lewis said...

Who ever said that government doesn't listen? ;-)

"...any tax you happen to find immoral..."

This is great news. I've always wondered how conservative state could have such a progressive tax structure.

Apparently the system just needed a reset and the senate has done an excellent job at working through all of the issues involved.

2/27/2006 8:50 AM  
Blogger Daniel said...

I'm confused...

"Over the next 10 to 20 years, Utah's income tax base will continue to shrink, severely under-funding education."

Yet this tax reform will effectively cut taxes from 7 percent to 5 percent, and you state that there are only a few unusual cases where taxpayers will pay more.

How can reducing taxes end up stabilizing funding for education? Can you explain this reasoning?

2/27/2006 1:03 PM  
Blogger western liberal warrior said...

The current tax was not all that progressive regardless of what Sen. Bramble and uninformed Jeff Lewis might think. The marginal rate ends up at 7% after only 7,000 in taxable income. Except for those in extreme circumstances, they are in the highest marginal rate.

Sen. Bramble's argument that a flat tax will fuel economic growth is nothing more than conservative propaganda. Investment in education and infrastructure will likely give Utahns a higher rate of return.

This bill makes about as much sense as a screen door in a submarine. Within three years, education funding will be the new crisis for the legislature is my projection.

2/27/2006 5:02 PM  
Anonymous Jeff Lewis said...

I have to tell a liberal that s/he is correct.

I choose my words poorly. I meant progressive as an idealology vs conservative as an idealology. And I guess that I really just meant high tax rate vs low tax rate. Progressives would be for a high tax rate to fund lots and lots of silly little projects while conservatives would be for a low tax rate to fund their vastly superior lifestyle. ;-)

Oh, and you're wrong about everything else... ;-)

2/28/2006 8:14 AM  
Blogger Daniel said...

Unfortunately, at least at the federal level right now, what we have is a bunch of conservatives funding "lots and lots of silly little projects" and running up a huge deficit. So lets leave the old conservative-versus-progressive debate behind and focus on what we want to do in our state.

Back here in Utah, no one has explained to me yet how cutting taxes stabilizes funding for education. If you really want to cut funding and squeeze out what you perceive to be are inefficiencies in our current system ... then be honest and say that. But if Sen. Bramble really believes that SB 242 will help to solve the problem of "severely under-funding education" I'd really like to hear how this helps.

2/28/2006 9:04 AM  
Anonymous Jeff Lewis said...

Now Daniel, you've made a mistake: conservative does not equal republican - Clinton much contributed less to the expansion of government than our current administration.

I don't speak for anyone but myself, but as for how lower taxes does improve the economy and produce higher tax revenues, take JFK's presidency as an example:

"Recognizing that high tax rates were hindering the economy, President Kennedy proposed across-the-board tax rate reductions that reduced the top tax rate from more than 90 percent down to 70 percent. What happened? Tax revenues climbed from $94 billion in 1961 to $153 billion in 1968, an increase of 62 percent (33 percent after adjusting for inflation)." -- http://www.heritage.org/Research/Taxes/wm327.cfm

There are many more historical examples on that page.

2/28/2006 12:35 PM  
Blogger ~plaid said...

I think the commentors are missing the point. There is not going to be a tax cut. There is only a suggested tax rate cut. But the base that the rate will be applied to increases. This results in a a tax increase! The suggestion is to change the base from the current Federal Taxable Income to the Federal Adjusted Gross Income. This means that there will be no personal exemptions and no standardized or itemized deductions. The lower your income, the more significant this change is. The higher your income, the less significant. This change will result in an increase for most taxpayers. The algorithm that is used to tout a tax reduction is combining the reduction in sales tax with the changes in income tax. However, this is a flawed calculation as well. The data used to estimate what one pays in sales tax on food annually is not representative of reality. These numbers came from the Utah Taxpayers Association, whose President is Senator Howard Stephenson.

I think people aren't paying attention. The population in Utah is increasing. Due to inflation and energy costs, prices on food is increasing. This results in a significant increase in revenue from the tax on the sale of food. By reducing the rate 2%, there is really not likely going to be a difference in revenue from the one year to the next. It is simply a loss of the increase that would come from these factors. Income tax rates will be cut, but the base it is applied to increases. There will likley be an increase of revenue from income tax. The state gets more tax revenue from this, the tax payer gets no relief, and no spending has to be cut so the Politicians become the super heroes.

3/07/2006 9:17 AM  

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