Who will get a tax cut and how much?
Several tax bills advance while another one dies
"We're going to have a tax cut in this session," said Rep. Jim Ferrin, R-Orem. The question is which taxes cut and how much, he and other House members said as they approved Ferrin's HB323.
In killing another bill, the House debated for the first time what's come to be known over the last three years as the Jones-Mascaro personal income tax reform bill.
As expected, conservative Republicans killed Jones-Mascaro, but at least Reps. Pat Jones, D-Cottonwood Heights, and Steve Mascaro, R-West Jordan, got their measure before the whole body. Their bills had either never had a hearing or were killed in committees in previous sessions.
Jones-Mascaro would rebracket Utah's current income tax system, raising taxes on larger families with higher incomes. For too long, the pair argued, big, rich Utah families were actually getting income tax breaks instead of paying more for their children's public education.
Larger, wealthier families would pay more, in some cases by $1,000 or $2,000. For example, a family of five making $275,000 would pay $1,434 more under Jones-Mascaro.
But a family of four making $45,000 a year would get a $258 a year tax cut.
"High income (Utahns) have had the pleasure of not paying their fair share of taxes for years to support education," said Mascaro. It is time well-to-do families with a number of kids start paying more, he added.
Ferrin proposes in his HB323 that the current tax system be kept, but the top rate of 7 percent would be lowered to 6.4 percent.
Under HB323, that same family of four making $45,000 a year would pay $93 less a year. But that family of five making $275,000 a year would get a tax cut of $1,155.
Key to Jones-Mascaro is that as middle-and-low-income Utahns paid less tax, wealthier Utahns would pay more — and overall Jones-Mascaro would not cost the state any tax revenue.
Since all personal and business income taxes go to public and higher education — HB323, which lowers the tax rates for everyone, would cost the Uniform School Fund $227 million.
Ferrin noted that a number of legislators want to slow growth in government. In fact, the House GOP caucus has voted for a $230 million tax cut. The question, said Ferrin, is whether the tax cut should come in sales tax, income tax or a combination of the two.
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