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Tax plan a good first step

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Gov. Jon Huntsman Jr.'s tax plan doesn't quite bring to mind images of former Gov. Olene Walker, who once held up a postcard and announced that a tax return could fit on it if her plan became law. Huntsman's dual-system plan probably would require many people to spend more time on their returns than they do now.

And yet the governor's proposal is a good step in the right direction. Of particular importance is the way in which he has tied it to a proposed sales-tax hike in Salt Lake County, which would fund extensions of light rail and commuter rail, as well as the purchase of right-of-way for a highway along the county's west side.

Political solutions are hardly ever perfect or simple. Walker's proposal suffered from a severe lack of political realism, which, like a tether to an airplane, kept it from flying. Huntsman and lawmakers have had their own political battles, as have politicians and various segments of the private sector. But the plan the governor is quickly trying to sell so that he can call a special legislative session late next month is an improvement over things as they are. It just isn't particularly clean or pretty.

If it passes, Utahns would be faced with a choice each spring. They could file tax returns based on the current system, with its many deductions for charitable giving, mortgage payments, etc., and its base rate of 7 percent. Or they could file under a 5.3 percent flat rate. The choice would be up to each individual, most likely based on whichever plan would require the least payment.

Huntsman is selling this as an economic development tool. Indeed, Utah is becoming an island in the midst of Western states that are adopting income-tax reform. The state could have trouble competing for business if its rates are too high.

But economic development can be overstated. Utah could never lower its income tax rate to zero, as it is in Nevada or Washington. Income tax is the primary source of revenue for this state's overcrowded school system.

And no matter what Utah does with income taxes, it still faces barriers to economic development that have more to do with its image, and with those overcrowded schools, than anything else.

No, if this plan passes, it should be because it helps the state sustain its current strong economy while allowing public education to still get the revenue it needs to handle its many needs. It should be because it recognizes that things such as mass transit deserve sensible support through sales taxes, rather than through the property tax hike Salt Lake County has been forced to consider instead.

It should be because it is a first step toward a more sensible and simple tax structure — one that eventually might fit on a postcard, when politics will allow.