Democratic Utah lawmaker proposes raising income taxes on those who make $250,000 or more

Democratic Utah lawmaker wants income tax increase

SALT LAKE CITY — Anyone in Utah who earns more than $250,000 a year would pay higher income taxes under a proposal being sponsored by a Democratic state lawmaker.

Rep. Brian King, of Salt Lake City, sponsored a bill that he said would raise more than $350 million for public and higher education beginning next year. Under House Bill 90, the marginal income tax rate for individuals making more than $250,000 would increase from 5 percent to 6 percent. The marginal tax rate for those who make $750,000 would increase from 5 percent to 7 percent.

“Look, nobody likes to pay higher taxes and for really wealthy folks this is a significant amount of higher taxes,” King said Wednesday. “But nobody’s in a better position to absorb that loss — bear that burden — than they are.”

Figures from the Utah Tax Commission show those who earn between $250,000 and $1 million a year comprise about 1.5 percent of all taxpayers. Those same filers accounted for about 14 percent of all income tax revenue.

Under Utah’s tax system, just about everybody pays the same 5 percent tax rate and there are only a few possible deductions. That change was made several years ago by former Gov. Jon Huntsman to lower the tax rate for affluent and middle class residents in the hopes of recruiting more businesses here.

King said that move — made when the state had budget surpluses — isn’t delivering the results Huntsman and Republican lawmakers promised.

“I don’t see evidence of it,” he said. “If that were empirically true, I think you’d find a lot more people moving to places like Florida where they have no income taxes at all. … Are people flocking to (Las) Vegas from Utah? I don’t see that, and I can’t imagine it would happen.”

King’s bill is likely to meet stiff resistance from Republicans who control the Legislature. GOP leaders have said they don’t want to raise any taxes, but if they do, increasing the tobacco tax is the first one they’ll consider. And even that would likely be to help curb smoking rather that find a steady source of new revenue to prop the state’s funding levels up to where they were just a few years ago.

“It’s easy to say for some just simply raise taxes. We’re down so far in revenue … down $1 billion dollars, that the tax increases that would be required to bring us up to where we were before would be so staggering that people who are advocating that don’t understand how far we are,” said Senate budget chairman Lyle Hillyard, R-Logan.

Republican Gov. Gary Herbert’s proposed budget includes no tax increases, but he has stopped short of saying he would veto a budget that includes them. Herbert has said a recession is the worst time to raise taxes because it would stunt economic growth and investment.

A message left with Herbert spokesman Angie Welling Wednesday was not immediately returned.