Income tax reduction? Abolish the tax on food products? Lawmakers are considering options

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SALT LAKE CITY — At the Utah Taxpayers Association’s annual legislative outlook conference, lawmakers stood up and touted their ideas for tax cuts.

Lawmakers are tabling a number of proposals to lower the income tax rate, eliminate the sales tax on groceries, expand Social Security eligibility and other measures. That’s because the state is brimming with cash from federal COVID-19 stimulus dollars and record-breaking revenue.

“We’ve seen year after year after year more revenue in the state of Utah per capita,” said House Speaker Brad Wilson, R-Kaysville.

As an election year approached, lawmakers felt pressure to grant a tax cut.

“We’ve been advocating since the spring for a big tax rate cut. We think there’s a lot of revenue to do that,” said Rusty Cannon, president of the Utah Taxpayers Association.

At least three bills have been proposed to reduce income tax. Senate Majority Leader Evan Vickers, R-Cedar City, proposed to lower the state income tax rate from 4.95% to 4.9%; Rep. Travis Seegmiller, R-St. george, proposed to reduce it to 4.75%; and Senator Dan McCay, R-Riverton, generously offered to reduce it to 4.6%.

Senator McCay told FOX 13 lawmakers might land somewhere in the middle.

“I’m just excited to talk honestly about how we’re giving them more Utahn tax money,” he said.

Senate Speaker J. Stuart Adams, R-Layton, said it would be healthy debate during the 45-day legislative session.

“We’ll have that debate, but right now we’ve set aside $160 million. That’s a minimum of what we’ll probably do. We can actually do more,” he told FOX 13. .

Another tax proposal would eliminate the state’s share of sales tax on groceries. Rep. Rosemary Lesser, D-Ogden, said she would sponsor a bill for total elimination (preserving a local sales tax option) with support from advocates for low-income Utahns.

“My bill would eliminate the tax, the state portion, at the registry. Without waiting for an appropriation,” she said.

The Utah Taxpayers Association has said it does not favor a repeal of the food tax, preferring instead to support income tax cuts. Governor Spencer Cox’s budget included a grocery tax credit for low-income Utahns. It’s an idea that has intrigued some advocacy groups, but a number of groups are rallying around Rep. Lesser’s bill. If his bill fails, there have been talks of a citizen ballot initiative.

Rep. Lesser said she hoped it wouldn’t come to that.

“At the end of the day, ballot initiatives are expensive, cumbersome, and I think as elected officials it’s our job to do our job,” she said.

Other tax bills are proposed, including Senate Minority Leader Karen Mayne’s Bill to Expand Social Security Tax Credit Eligibility. Sen. McCay told FOX 13 he was also speaking with Rep. Mike Winder, R-West Valley City, about an earned income tax credit.

“A state-level earned income tax credit that could help offset some of the concerns that exist with just a flat reduction,” he said.

President Wilson said he expects a healthy debate on tax policy.

“We’re going to keep reducing that because we think the best way to help Utahns is to let them keep more of their own money, spend it, and use it however they want.” he declared.


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