Salt Lake City, Utah - Utah Governor Jon M. Huntsman, Jr., today unveiled his proposed income tax reform package. The plan comes after months of deliberations by the Tax Reform Task Force. The plan was presented to the Task Force by the Governor's tax advisors this morning.
"This proposal is flatter, fairer and simpler than the current structure and will make Utah highly competitive in our economic development efforts," said Governor Huntsman. "At the same time, this proposal will protect the lower income individuals and families in our state."
The plan lowers the income tax rate from seven percent to five percent. The proposed rate will take Utah from the 16th highest rate in the nation to the 35th highest. Utah's rate will be lower than all Western states except Colorado.
The proposal allows for an exemption of $12,000 per household, regardless of income levels. In addition, there will be a $4,000 per person exemption for each dependent. (See examples below.) In addition, the charitable tax credit is anticipated to encourage greater charitable giving.
"If correctly implemented, in the long run, everyone wins," said Keith Prescott, one of the tax advisors who crafted the new plan. "One of Governor Huntsman's goals was to protect the lower income individuals and families, while creating a more competitive economic environment and this plan meets that objective."
The income tax reform proposal should also make the process of filing taxes much simpler. The current income tax filing could go from the current two pages with 18-pages of instruction, to a simple postcard-sized form.
Western Income Tax Rates
Current vs. Proposed Scenarios (Four Exemptions)