Crunching the numbers
There are no comments for this page [ Add Comment ]Tuesday, February 20, 2007
Two hundred twenty-six bucks.
If you divide the Legislature's proposed $220 million tax cut by Utah's 971,239 income tax filers (the most recent number available), it works out to $226 each.
And who wouldn't want an extra $226 in their pocket? Except that's not what it will be. People who make more money pay more taxes, so they'll probably get back more than $226. And people who earn less and pay fewer taxes probably will see their tax cut amount to less than $226.
Or not.
See, lawmakers -- the House and Senate -- are currently locked in a battle over which taxes to trim and by how much. With less than two weeks to go in the regular legislative session, some are predicting this whole tax-cut business will have to wait for a special session in the spring. Those who are more optimistic say it'll get done before the end of the current session.
The thing is, legislators are sorting out important policy matters. And this is no simple task, since they're trying to navigate between the state's two income-tax systems. Some want to lower to 5 percent the so-called 5.35 percent "flat tax" system established last year. Others would like to see the traditional/progressive income-tax system -- the one that applies to most of us -- reduce its rate from 6.98 percent to 6.7 percent. Finding agreement on that one could be tough.
Likewise, eliminating the rest of the sales tax on unprepared food -- the grocery tax -- is a bone of contention between the House and Senate.
The Senate's leadership declared further reductions in the grocery tax to be dead for 2007, but the House leadership is still pushing.
Furthermore, some of the state's tax experts are advising lawmakers to reform the income-tax system in ways to guard against feast or famine revenue streams for public and higher education.
Since the state Constitution requires that all income-tax revenues be spent on schools, years like this one are good for education -- there will probably be $300 million more in ongoing funding in next year's school budget.
But in lean years, like the ones we experienced earlier in this decade, lawmakers had to deplete the Rainy Day Fund to make ends meet.
Last week, lawmakers were told if they cut tax rates, they should also increase the maximum size of the Rainy Day Fund to guard against future shortfalls in times of economic downturn.
So, with the decisions about dollars and cents now being made, if you have feelings one way or the other about education funding, sales tax on food, transportation and roads, or any other big budget items on the state's list, now is the time to begin calling and e-mailing your representative and senator to let them know what you think they should do. You'll find that contact information at www.le.state.ut.us/
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