Legislators discuss increasing taxes on food and on high-earners

February 20, 2017 Utah Channel 3

ST. GEORGE – A bill proposed in the Utah Senate would raise the income tax for Utahns with taxable income over $250,000 for an individual or $500,000 for a married couple.

The measure would benefit school children by raising another $322 million annually for education.

The Income Tax Amendments bill, sponsored by Sen. Jim Dabakis, D-Salt Lake, would increase the tax rate for high-earning individuals from the current 5 percent to 7 percent.

“It’s exactly the kind of money that Washington County needs to feed the minds of all of those emerging fabulous kids there,” Dabakis said, alluding to children who are being cheated by having the biggest class sizes in the nation.

Dabakis believes the bill is a more equitable way to raise money for education than a proposed increase in sales tax on unprepared food proposed by Utah GOP leaders last week.

According to a report in UtahPolicy.com and in the Deseret News, Utah Republicans are considering reinstating the state sales tax back on unprepared food, then lowering the tax rate to make the actions revenue-neutral in 2018.

Republicans plan to make other changes to the sales tax, income tax and gas tax in the final three weeks of the legislative session, although no bills have yet been proposed, UtahPolicy reports.

“They want to raise money from the poorest of the poor,” Dabakis said.

“There’s not a more regressive tax on planet Earth,” he said. “You take families that are just barely getting by and you raise their family food tax.”

Ultimately there are two choices, Dabakis said. The first choice is increasing taxes for people who have done “very, very, very well” and raising $321 million a year; the second is increasing the tax on food and raising $180 million each year.

“For me, that’s not a hard choice.”

“Our school kids are desperate. We’re 50th in nation in spending per kid,” Dabakis said. “Our kids in Southern Utah simply are not going to be able to keep competitive internationally if we don’t start making a broader commitment to education.”

The proposed income tax increase would only affect high-earning Utahns who have benefited from economic conditions in recent years, and would change the rate back to the 7 percent it was in 2006, Dabakis said.

In 2006, Utah went to a flat tax; prior to that the highest state income tax rate was 7 percent, and couples making over $500,000 paid the 7 percent, Dabakis said.

“We gave them (high-income individuals) the biggest tax cut in the history of the state of Utah,” Dabakis said; and the result was that money was taken from neighborhood schools and put into the pockets of the state’s richest families.

“The Republicans are out of touch with common working-class people,” Dabakis said. “They’ve forgotten what it’s like to actually go work for a living.”

Raising the sales tax on food wouldn’t help education anyway, because the funds raised would go into the state’s general fund.

The Income Tax Amendments bill was introduced Jan. 31. Under the proposed bill, the higher rates would also apply to resident and nonresident estates and trusts. If passed, the changes would take effect Jan. 1, 2018.

Resources

Read the bill: 2017 – SB 141 Income Tax Amendments

Contact legislators:
- Bill sponsor: Sen. Jim Dabakis
- Southern Utah Sens. Ralph Okerlund, Don Ipson, Evan Vickers and David Hinkins | Listing of all senators.
- Southern Utah Reps. Walt Brooks, Merrill Nelson, Brad Last, John Westwood, Mike Noel, V. Lowry Snow and Jon Stanard | Listing of all members of the House of Representatives.

Email: japplegate@stgnews.com

Twitter: @STGnews