Many Utahns never felt the recent earthquake. It occurred when a legislative fiscal report warned that growth in income-tax revenues will drop nearly 50 percent, down a sizeable $149 million. Legislators now have only the bare minimum of funds for schools to keep pace with enrollment growth and inflation.
Utah's wealthiest 1 percent reaped huge financial gains over the past four years and naturally paid more income tax (thus creating surpluses). Our GOP leadership felt their pain and rushed in to lower the top tax rate. Yet decades have passed where the middle-class has wrongfully been moved into the upper tax rate without similar tax relief. Approximately 100,000 taxpayers, many retired or families with moderate incomes, will actually pay more rather than less income tax next year because of the new reforms.
For decades we've been taxing nearly all workers at one rate - 7 percent. Raising public education funding in this fashion has damaged our social fabric by pitting taxpayers against schoolteachers, childless couples and retirees against families with children. I find it ironic that we now have an income-tax policy called a "5 percent single-rate" policy when in fact, there are actually two rates, and the higher tax rate, 6.3 percent applies to the average worker.
Legislators could have used a multiple tax rate policy, providing substantial tax relief ($500 tax cut) to the moderate-income taxpayer and also protecting our public school funds. The current single-rate income tax policy does neither.