Cut Utah's income tax rate to 4.5%? Senate leaders say that's too much

SALT LAKE CITY, Utah (KUTV) — Another income tax reduction bill has been introduced at the Utah Legislature.

House Bill 197, sponsored by Rep. Nelson Abbott (R-Orem), would reduce the state’s income tax rate from 4.95 percent to 4.5 percent. It’s the fourth bill so far proposing to slash that rate.

"We've had tremendous growth in Utah. Taxpayers are being productive, and we've seen an increase in tax revenues," Abbott told KUTV 2News. "I think it's time to reduce our tax rate and give that back to the taxpayers."

Other bills propose cutting the current rate to anywhere from 4.6 to 4.9 percent.

Sen. Evan Vickers (R-Cedar City), the Senate majority leader, told reporters Thursday discussions were ongoing about a tax cut, but Abbott's proposal is too much.

“Four-point-five is a significant amount of money,” Vickers said. “If you go into that range, you’re playing with funny money.”

Vickers said the Senate plans are “more modest” with cutting the rate to around 4.85 percent, which he said is in line with money already set aside by legislative leaders for a tax reduction.

Senate President Stuart Adams (R-Layton) agreed and said the approach to a tax cut this year would be “prudent.” He also said a tax cut in 2023 was likely.

“I think it’s better to measure twice and cut once,” Adams said.

Abbott disagreed that his proposal would cut the tax rate too much.

" I don't think it's too low," he said. "I think the taxpayers will appreciate it. It's the money that they've earned, and they ought to be able to keep it."

During a news conference Thursday outlining their policy priorities, House and Senate Democrats pushed for a proposal from Rep. Rosemary Lesser (D-Ogden) to remove the state sales tax on food, but not candy.

That’s in contrast to a proposed grocery tax credit put forward by Gov. Spencer Cox in his budget proposal. His office said that tax credit "would give more money back to lower- and middle-income households than cutting the food tax would."

Lesser argued her proposal would better serve Utahns.

“It doesn’t involve any high-handed administration of having people receive quarterly payments or requesting money eight or ten months after it’s needed,” Lesser said. “So, in that case, we’re embracing simplicity for Utah families and residents.”