Recent tax cuts enacted by the Utah Legislature are more or less proportional, according to a study by the Utah Foundation.
"While it is true that raising the deduction for federal income taxes paid from one-third to one-half will benefit high income taxpayers more than low income taxpayers, other changes scheduled for 1989 tend to offset this advantage," the report said.A scheduled higher personal exemption and an increase in the standard deduction this year will benefit taxpayers mainly at the lower income levels, the study shows. In addition, the new law calls for a 2 percent across-the-board reduction in rates.
When all changes to the tax laws are factored in, the study revealed that the percentage reduction in taxes between 1988 and 1989 are roughly the same at various income levels.
"In fact, the percentage cuts at the lower income levels are even somewhat more than they are at the higher income levels. Only at the middle income levels are the percentage reductions slightly less than they are for either the lower or higher income groups."
The Foundation study looked at all changes to Utah's tax law since 1986, including the Federal Tax Reform Act of 1986, 1987 tax increases enacted by the Legislature, changes made in the 1988 Legislature and additional changes during the 1988 and 1989 special sessions.