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Thursday, March 27, 2008Your tax return: 2007 vs. 2008
April 15th is fast approaching.
Over the last two years we cut taxes by almost $400 million and revamped the system (you remember that, right?). You'll file under the new system in 2009 but this is a transition year.  So, will you pay more income tax this year or next? Here's the calculator. Fill it in and compare for yourself. And here's a fact sheet posted by the Utah State Tax Commission. And an op-ed piece by Senator Wayne Niederhauser.
posted by The Senate Site at 11:53 PM | Link
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© 2008. All rights reserved. Designed by Jeremy Wright & His Brother-In-Law
6 Comments:
My tax liability was three times higher on the new system. Yuck!
I see the Retirement Deduction got "flipped" to a credit, so that former deduction won't be lost to those who qualify for it.
What about the Disabled Dependent Exemption? On a draft copy of the new TC-40 there was no longer a place to indicate that a family has a qualified disabled dependent (and therefore qualified for an additional exemption on the tax return). Has this deduction been swept away? If the retirement exemption was changed into a new credit, why not the disabled dependent deduction???
According to the state tax commission site the exemption for disabled dependants was repealed and no longer available. I agree if the retirement exemption was changed to a new credit why not the disabled dependant deduction as well?
The income tax reform started with Governor Walker. There was concern that the bracketed income system was extremely volatile. In good times, there were sharp peaks in revenues. In bad economic times, there were deep valleys. Income tax is the funding source for the State's portion of education funds. It was desirable to make this revenue source more consistent. Extensive study revealed that a flat tax with no deductions, exemptions and credits was the most stable model for revenue generation. As a result, the legislature spent several years debating a change. In the end, the legislature took the flat tax and then added back certain exempts and deductions as credits to get closer to the goal of revenue stabilization. Not all exemptions and deductions were turned to credits. Some of the difference for tax payers would be made up by giving the remaining exemptions and deductions a 6% credit rate while charging income a 5% rate. In other words, supercharging the credits to be subtracted from the amount of income tax. I encourage those who have used the disabled dependant exemption in the past to calculate your tax for 2008, compare it with your 2007 tax and then send me the results of the difference. My email is wniederhauser@utahsenate.org.
76 years old, retired with very, very small pension, Social Security and required IRA distribution equals a 66% increase over 2007.
What is fair about this?
Just finished doing the 2008 taxes and for fun I ran the calculation using the 2007 rules. 2008 results in a 19% increase, ouch. I then ran the current taxes through the comparison calculator and found that none of my numbers matched those on the calculator, 07 or 08. I know someone will claim they cut my taxes but I happen to know they went up $606.
I really wish this were really a flat tax. Cut out all the social engineering and favoritism's and just let it be...equal for everyone. Then cut spending and lower the taxes for real.
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