Bill that would cut Utah’s income tax rate moves forward
SB59, now sponsored by Sen. Daniel McCay, R-Riverton, would reduce Utah’s income tax rate from 4.95% to 4.85%.
A bill that would reduce the state income tax rate for residents and corporations has been passed Senate Committee on Revenue and Taxation Wednesday on a 6-2 vote.
The law project, SB59, introduced by Senate Majority Leader Evan Vickers, R-Cedar City, originally sought to reduce the state income tax rate from 4.95% to 4.9%. This replacement bill, now sponsored by Sen. Daniel McCay, R-Riverton, reduces the tax rate to 4.85%.
“Our rainy day fund is nearly full, and we’re now in a position where we can take some of that money and return it to taxpayers,” McCay said, referring to the government’s projected budget surplus. State.
The bill would result in ongoing tax relief of $163.7 million. Under the bill, McCay said a family of four, earning an annual income of $72,000 a year, would receive a tax cut of about $100 a year.
“It’s not a big number, but it makes a difference to those earning that income,” McCay said.
Sen. Luz Escamilla, D-Salt Lake City, who voted against the bill, said she would rather focus on the proposed $160 million spending by helping with education, child care and social services. Escamilla added that eliminating the food sales tax would have more of an impact for needy Utahns.
During the public comment portion of the meeting, Rusty Cannon, president of the Utah Taxpayers Association, said that after property taxes, the second highest tax burden facing Utah families are facing is state income tax and called for a bigger tax cut than what is being proposed now. .
“Families are currently facing high inflation,” he said. “There should be…a lot of room to make this even bigger for taxpayers with a bigger income tax cut.”
Matthew Weinstein, director of tax policy for the advocacy group, Utah Children’s Voicessuggested that lawmakers exercise caution when addressing the income tax cut proposal and called for an earned income tax credit.
“Solving Utah’s labor shortage would be aided by an Earned Income Tax Credit, which not only helps alleviate poverty through people’s work effort, but also attracts workers in the economy and help the economy in this way,” he said.
Any reduction in income tax reduces the amount of revenue available to the state to fund public and higher education since these funds are constitutionally designated for this purpose. Lawmakers say any reduction in revenue will be replaced by future economic growth.
“You need to use a balanced approach that keeps your economy growing and therefore your income tax increases over time. It’s a balancing act. There’s never just one way to do this,” Senate Majority Whip Ann Millner, R-Ogden, told reporters this week.
It’s possible the tax cut could be bigger, but inflation concerns could put a damper on it, Senate Speaker Stuart Adams, R-Layton, said.
“It could be a bit higher in some areas, but we’ll have to see,” Adams added.
Tribune reporter Bryan Schott contributed to this story.