Unable to get income tax reform through the Republican-dominated Legislature, Utah's Democratic Party will try to take its tax fairness cause to the people in November's election.
State party chairman Dave Jones filed an initiative petition Wednesday with the lieutenant governor's office. Democrats must now gather 76,000 signatures from throughout the state by June to place their income-tax reform plan on the ballot.In filing the petition, Democrats are following through on a threat made several months ago that if the GOP Legislature doesn't pass income tax-reform legislation, the party would take it to the people.
Democratic lawmakers have attempted income-tax reform for years without success. Last week, the House Revenue and Taxation standing committee effectively tabled HB65, sponsored by Rep. Grant Protzman, D-N. Ogden, which would realign state income tax brackets, cut taxes on middle incomes and increase taxes on higher incomes. The GOP-dominated committee amended it to extend the tax cut to higher incomes, then refused to act on the bill.
Protzman said he would try to revive the bill on the floor. "But we are not optimistic," he noted.
Protzman said the current income-tax system is outdated, with low- and middle-income Utahns paying the same 7.2 top rate as the wealthy. Citing figures from a recent study by the State Tax Commission, he said lower income groups pay a larger share of their earnings on sales, property and income taxes.
The petition calls for a new 9 percent rate to kick in at $60,000 for couples and at $30,000 for singles. Democrats also propose adjusting the lower tax rates so they apply to a broader range of incomes. The result would be tax cuts of $24 to $214 for incomes from $10,000 to $60,000; and tax increases of $2 to $3,206 for incomes from $72,000 to $250,000.
Protzman, assistant minority whip, accused Republicans of ignoring the middle class and protecting the rich. "They won't support something that hits their main contributors," he said.
But House Majority Leader Marty Stephens, R-Farr West, said that isn't why Republican lawmakers won't support it.
The sales and property taxes prey on the poor and middle class in Utah, Stephens explained, not the income tax. He said his party has already responded to all Utahns with a proposed $23.5 million sales-tax cut and an $8.5 million plan to head off a property-tax increase this year.