Tax Cut
The House Republican caucus met today and discussed tax cuts, among other things. In particular, we discussed the $70 million that was set aside for an income tax cut. Today, the House Republicans tallied 50 votes to return the money to taxpayers in the form of a simple rate reduction.
Though they have not taken a position, I hear that the Senate might not be too far from that position.
Unfortunately, the Legislature cannot call itself into a special session. That power is left exclusively to the Governor. However, the Governor has indicated that he will not call a special session to deal with any tax plan other than his "simpler, fairer" plan -- meaning, as things stand now, there won't be a special session and there won't be an income tax cut. The numbers generated by the Tax Commission regarding the "simpler, fairer" plan were significantly off the mark (and, maybe more to the point, the plan lacks the necessary support in the House).
It would be nice to have a stand-alone session on the truly simple plan -- reducing the rate. Our state system is not overly complex. It simply takes too much money and, because of that, slows economic growth. Because our current system is coupled to the federal system, once a taxpayer does his/her federal taxes, it is a simple process to generate the state return.
To deal with the high top rate (which applies to the vast majority of taxpayers), I think we should commit to reduce it from 7% to 6% by 2010 (rather than drastically cut it and, then, claw back the revenue on the backside, by reducing exemptions and deductions). It's not sexy, but it is good policy. The plan I support would start with a healthy .22 reduction this year.
UPDATE (later): I better give some credit where credit is due. Rep. Jim Ferrin ran a bill that basically would have accomplished what I outline above. Sen. Tom Hatch (and Sen. Bill Hickman) did the same in the Senate. And though I'm too pressed at the moment to find it, Rep. Jim Dunnigan had a substitute to the "simpler, fairer" bill that would have accomplished the same thing.
Senate Majority Leader Pete Knudson opines that the Senate might not be too far from the position outlined above. That would be great. Stay tuned.
Though they have not taken a position, I hear that the Senate might not be too far from that position.
Unfortunately, the Legislature cannot call itself into a special session. That power is left exclusively to the Governor. However, the Governor has indicated that he will not call a special session to deal with any tax plan other than his "simpler, fairer" plan -- meaning, as things stand now, there won't be a special session and there won't be an income tax cut. The numbers generated by the Tax Commission regarding the "simpler, fairer" plan were significantly off the mark (and, maybe more to the point, the plan lacks the necessary support in the House).
It would be nice to have a stand-alone session on the truly simple plan -- reducing the rate. Our state system is not overly complex. It simply takes too much money and, because of that, slows economic growth. Because our current system is coupled to the federal system, once a taxpayer does his/her federal taxes, it is a simple process to generate the state return.
To deal with the high top rate (which applies to the vast majority of taxpayers), I think we should commit to reduce it from 7% to 6% by 2010 (rather than drastically cut it and, then, claw back the revenue on the backside, by reducing exemptions and deductions). It's not sexy, but it is good policy. The plan I support would start with a healthy .22 reduction this year.
UPDATE (later): I better give some credit where credit is due. Rep. Jim Ferrin ran a bill that basically would have accomplished what I outline above. Sen. Tom Hatch (and Sen. Bill Hickman) did the same in the Senate. And though I'm too pressed at the moment to find it, Rep. Jim Dunnigan had a substitute to the "simpler, fairer" bill that would have accomplished the same thing.
Senate Majority Leader Pete Knudson opines that the Senate might not be too far from the position outlined above. That would be great. Stay tuned.
posted by steve u. at 4/19/2006
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8 Comments:
Your right it isn't sexy, but it sounds much better than I was anticipating from the flat tax. I truly can applaude and appreciate a 1 percent rate reduction as a decent and fair tax cut.
I fell out of the loop during tax season, was the discontinuation of the sale tax on food passed or scrubbed?
We were unable to cut all of it, but did manage to cut 2%. Taxpayers save 2 bucks or so on a trip to the grocery store; better than nothing and, possible, a starting point for future cuts.
I can't begin to tell you how proud I am of Speaker Curtis on the food tax issue. Tough as nails.
Nice report Steve. If we can't agree to a broader tax reform proposal yet, and if we left $ 70 million unspent, it seems the least we can do is to not take it from the citizens in the first place. It won't amount to an awful lot per taxpayer but we should keep in mind whose money it is in the first place. Thanks for your support of this proposal. I hope the Governor agrees with this.
Tough as nails...
That's the problem. Tough doesn't mean Bright, Good, or Wise. Does he have any idea how expensive and complicated his partiel cut on "food," but not on other items, makes it for vendors at the cash register?
He inflicted significant damage on small business statewide just to save face and claim a miniscule victory in front of those gullible enough to believe him.
Because of his revengeful nature, there is no way I will attach my name to these words (and no way anyone will have an honest debate with him in the room. We all flatter him to his face). Your smarter and less emotional than he is. You should be Speaker.
I look forward to seeing an across the board rate reduction, even if it doesn't make it into the special session this year. I agree with Rep. Ferrin that we need to remember whose money it is.
My fan,
Though it's not wise to tick off the fan club, blame me too. I was in there for every punch and am very proud to have helped get the ball rolling on elimination of the food tax.
We did put in some mitigation money that I hope helps with the transition on the food tax issue.
You think what you think about Greg, and I'm not going to convince you otherwise in this setting, but I want to be clear that I consider it a great privilege to serve with Speaker Curtis. Having opposed Greg on many things over the years, I think he is a great competitor and extremely fair. And I think his toughness is what makes the House so strong and, thereby, improves state government overall.
The two speakers I've served with are quite different in their approaches, but I'll cherish the fact that I was on their team. Though your words are kind, I have quite a ways to go before I'd feel comfortable being compared to either.
Where is the data that show Utah's income tax rate "slows the economy?" Or, where is the data that show a cut in the state income tax will stimulate the state economy? Does an income tax cut say that the legislature considers public education "fully funded?"
I can not stand the inane phrase "fully funded" when it comes to education. No one, not one person, will put a dollar figure on that. In the '90's the education budget increased by almost 100% and the student population increased by only 3%. What happened to that money? No one can account for it. No matter how much gets poured in someone can figure out another way to spend it. Either define "fully funded" or stop using that insulting phrase.
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