Utahns want the sales tax off food, many preferring a plan suggested by House Speaker Greg Curtis; they want business taxes cut for economic development; and they are split on "reforming" the state's income tax system, a new poll shows.
The Deseret Morning News and KSL-TV asked Utahns about half-a-dozen so-called "tax reform" proposals now being discussed by legislators and the Tax Reform Task Force, a group of 15 lawmakers and executive branch officials who have conducted an in-depth study of state and local taxes over the spring, summer and fall.
The task force's last meeting is scheduled for Nov. 28, when it will make major recommendations on income and sales taxes to January's 2006 Legislature.
Pollster Dan Jones & Associates found 38 percent of Utahns favor the plan of Curtis, R-Sandy, to remove the sales tax from food and raise the sales tax on nonfood items slightly so as not to lose $225 million in state and local government revenues that the food tax now brings in.
Twenty-six percent favor a plan by Senate President John Valentine, R-Orem, to remove the food sales tax and then cut state programs as needed to balance the 2006-07 budget.
Jones found 18 percent favor a plan to give low-income Utahns a $75-per-person income tax rebate in lieu of cutting the food sales tax.
Seventeen percent either mentioned some other way to cut the food tax or didn't have an opinion, Jones found.
Overall, it was clear from the poll that a huge majority of Utahns want the sales tax off food, the disagreement coming over the best way to do it, said Jones.
Utahns are mixed over whether to change the state income tax. Jones found 42 percent of Utahns don't want to mess with the current state income tax system at all — just cut the income tax rate as a way to return money to residents.
A third of Utahns favor a modified flat-rate income tax plan put forward by Gov. Jon Huntsman Jr. — a flat rate 5 percent income tax for all Utahns with credits given for charitable giving and home mortgage interest.
Only 15 percent favor a 4 percent flat-rate income tax that gives some kind of deduction for charitable and mortgage interest.
The poll shows, then, that 48 percent of Utahns favor one or the other type of flat-rate tax, while 42 percent want to keep the current system and just get a rate cut.
Finally, a healthy majority — 57 percent — favor giving Utah businesses some kind of tax breaks next year to encourage economic and job growth, while 38 percent oppose such breaks.
The poll of 400 Utahns was conducted Nov. 10-12. It has a margin of error of plus or minus 5 percent.
The task force is considering several different kinds of business tax breaks, including allowing Utah-based corporations to figure their income taxes in different ways which would, overall, be a $32.6 million tax cut.
Curtis said Monday he's encouraged that 38 percent of Utahns favor his sales-tax-off-food plan.
Jones found 40 percent of Republicans and 36 percent of members of The Church of Jesus Christ of Latter-day Saints favor the Curtis plan. By and large, GOP lawmakers' base consists of LDS Republican voters.
"I'm firmly committed to taking the sales tax off food this year," Curtis said.
He said he already has 38 votes (a majority) for his plan in the House.
"I don't know if I could get 38 votes (between Republicans and Democrats) to take the sales tax off food and cut higher education and Human Services budgets by $200 million" — the Valentine plan, the speaker said.
"But if the Senate is serious about making these cuts in programs, I'll show up at our Executive Appropriations (Committee) in December with the motion to take that $200 million right off the table" and then instruct each individual budget subcommittee to make percentage cuts to make up that money, Curtis said.
"We'll fight like mad to get those cuts through the House, and then we'll send them to the Senate," Curtis said. "But I don't think the votes are there in either the House or the Senate to make such large cuts" to popular programs, and so his food tax proposal is a viable back-up, he added.
Curtis would cut the whole state and local sales tax from unprepared food items. He would then raise the state sales tax rate on nonfood items by 0.5 percentage points. For local governments, he'd raise their 1 percent local option sales tax to 1.1 percent.
So the basic non-food rate in Utah would go from the current 5.75 percent to 6.35 percent. Under the Curtis plan, overall taxpayers would see a $37 million sales tax cut, much less than the $225 million sales tax cut of the Valentine plan.
The third alternative — supported by the fewest number of Utahns, the poll shows — would provide a $75-per-person income tax credit for low-income Utahns, who carry the heaviest food tax burden because a larger percentage of their income goes to unprepared food.
Curtis and some low-income advocates say poor Utahns don't pay income taxes now, and so don't file a state return. To get the $75 credit, they would have to file a return, and some low-income advocates say maybe half the Utahns who qualify for the credit would actually file. Thus, the $50 million estimated tax cut the credit could give really would be more like a $25 million tax cut — the least of any of the food tax proposals.