SALT LAKE CITY — A bill will be introduced in the next legislative session to cut the state income tax rate.
Senate Majority Leader Evan Vickers, R-Cedar City, has opened the bill file to reduce Utahns' income tax rate from 4.95% to 4.9%. That will be about $65 million, he said in an interview with FOX 13.
"We feel like our economy’s in a position right now where we could look at a strategy like that," Sen. Vickers said. "We did actually look at that strategy along with some of the targeted cuts last year, but we felt it wasn’t the right time."
What the legislature passed was $100 million in cuts to the military retirement income tax and the Social Security income tax, as well as restoring the dependent exemption. While the legislature felt some pressure to cut the overall income tax, they did not.
Now, the legislature is seeing healthy revenues and federal stimulus and Sen. Vickers said it was time to offer a broader cut.
"There was an awful lot of people that didn’t benefit from some of our targeted cuts. Obviously, Social Security, military families, they benefit significantly. Those are important groups. Broadly, there was a lot of people that didn’t benefit. We felt like it was important to address that," he said.
Governor Spencer Cox has also floated the idea of tax cuts.
While pleased to see a tax cut offered, Rusty Cannon with the Utah Taxpayers Association said it wasn't enough. On $50,000 of taxable income, dropping the rate from 4.95% to 4.9% would only be about $25, he said.
Cannon told FOX 13 his group is pushing lawmakers to cut the rate to 4.5% — as much as $500 million.
"Taxpayers deserve this relief. You look at those that are trying to afford a home along the Wasatch Front, those that don’t want to have to move far away from their family to afford housing if they’re young. You have senior citizens that have higher property tax burdens, every year? We need to give them more relief," he said.
The legislature could see more than a billion in revenues this year as a result of a health economic boom the state is experiencing. Cannon said the Utah Taxpayers Association does not believe it will be a one-time thing.
"They can significantly cut taxes and still have plenty left to fund education, to fund roads and all that," he said.
But Moe Hickey of the advocacy group Voices for Utah Children said lawmakers should not be cutting taxes when there are other priorities that need funding.
"Voices for Utah Children is opposed to a cut in our income tax. We are currently at a 50 year low in our tax effort. Recent cuts have led to approximately a $2.5B reduction in revenue. We think that now is the time to actually invest in our children and families," Hickey said. "We are 49th in per pupil funding, 51st in childcare, have one of the highest rates of teen suicide per capita and had the largest percentage growth in uninsured children in the country over the past year. We should be using our good economy to address these and many other issues prior to discussing cutting taxes."
Sen. Vickers said the legislature will consider the tax rate cut when the 2022 session begins in January.
