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Since tax reform failed to stick in January of last year, new ideas have been needed to deliver real tax cuts to Utah taxpayers. An ongoing problem has been the tremendous growth of income tax receipts for the state. Since the 2007 Huntsman tax cuts, the Utah economy has soared and has brought with it a large amount of budget growth as the income tax rate hasn’t strayed very far from 5%.
And even with the pandemic, that trend has not fallen very much, with Utah experiencing a rather large tax surplus this year. The problem is that most of that money is only available one-time and not on-going. Senator Lincoln Fillmore’s Senate Bill 206 presents a fiscally sound solution. SB 206 reduces the income tax rate from 4.95% to 4.75%, but would only last beyond this tax year if income tax receipts continue to keep pace.
Utahns would be provided with $256 million of tax relief without the fear of a subsequent decrease in services, and it is unlikely, barring a recession, that the income tax rate would need to be raised back to 4.95%.
