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Republican tax plan could hurt Republican-dominated Utah

Posted at 6:31 PM, Oct 20, 2017
and last updated 2017-10-20 20:31:31-04

SALT LAKE CITY -- Utah may end up with the short straw if the Republican tax plan goes through as originally designed.

That's the conclusion of policy analysts from the Tax Policy Center at the Brookings Institution in Washington.

A report from the TPC says the biggest tax increase in the plan is aimed squarely at majority Democratic states, and Utah.

The plan would eliminate the deduction for state and local taxes. That hits hard for residents of high tax states like New York and California, which have Democratic majorities.

But it also hits hard against Utah, despite relatively low taxes.

The reason is most likely tithing expectations for members of The Church of Jesus Christ of Latter-day Saints.

The average middle class earner in America does not give enough money to charity to take itemized deductions. Instead, they take a standard deduction from the federal government and taxes don't come into play.

But people who pay a lot in state and local taxes, or who give a lot to charity, benefit more from itemized deductions.

Utahns would likely benefit from other portions of the proposed Republican tax plan. The proposal calls for doubling the standard deduction to $24,000 for married couples and $12,000 for single filers. That would make the standard deduction more beneficial for a lot of lower and middle class Utahns who itemize under the current system.

The proposal also calls for an increased child tax credit, with clear benefits for young Utah families.