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Show Statehouse Report . . , Integration of State ant! Federal Income Tax Beset With Pitfalls BY C. SHARP Don't expect a magic wand to wave and compute your state income tax at its present pres-ent ration to federal income tax once you have figured your federal return. This warning is sounded by tax experts in the face of optimistic op-timistic statements by accountants, ac-countants, attorneys and Legislative Le-gislative Council committee members working to achieve that end. - The facts are that federal income tax regulations ars considerably easier on the very wealthy than are state laws and regulations. ' For instance, the state charges 100 per cent income tax on capital gains and the federal only 50 per cent. Depletion De-pletion and other allowances also are more favorable on the federal returns. Could Favor Wealthy ; If, therefore, the state income in-come tax is based on the net taxable income from the federal fed-eral return, the tendency 9ould be to raise the state rates a little to compensate for losses in accepting the federal deductions in the higher brackets. ; Lewis H. Lloyd, Legislative Council director, believes the state rate could be upped for the higher brackets to compensate com-pensate for this. The present exemption of federal tax paid from the state tax also could be eliminated and rates adjusted ad-justed so as not to hit the taxpayer harder, or other adjustments made, he said. ';. The fact remains that a constitutional amendment on the ballot would be required, according to legal advices, to base the state income tax on the federal returns. If labor unions and others get the idea that their staig income tax would be raised and wealthy persons' state tax would be lowered as part of the conversion, this constitutional con-stitutional amendment would be doomed. Vote in 1970 The proposed amendment as is being prepared by the council could get onto the ballots in the 1970 election. All proposed constitutional amendments were defeated at the November 1966 election elec-tion due apparently to big money opposition to some of them. House Speaker Franklin W. Gunnell, Logan, is out and running for the Republican nomination for governor. This was evident Jan. 13 when he addressed the Independent Inde-pendent American Women in the auditorium of the State Office Building. Voluntary Surrender He said Americans may be the first to voluntarily surrender sur-render their private property rights. He advocates a ceiling ceil-ing on property tax. Also running hard for the same nomination is Sen. W. Hughes Brockbank, R-Sait Lake, chairman of the Legislative Legis-lative Budget-Audit Committee Commit-tee and sponsor of the mini-bottle mini-bottle liquor proposal defeated defeat-ed in the Legislature. Republicans are quick to point out that Gov. Calvin L. Rampton has achieved some of the objectives of the mini- bill. Several motels now have package liquor agencies adjoining ad-joining their dining rooms. Patrons can buy a mini-bottle and drink it as they eat. Sponsors of a proposal to put a referendum for liquor by the drink on the ballot next November reportedly have raised plenty of money to finance a campaign to obtain ob-tain the necessary signatures in time. Five Amendments The 1967 Legislature acted to place five proposed constitutional con-stitutional amendments on the ballot. These would provide for assessing agricultural lands at their value for agricultural agricultur-al purposes rather than their speculative value; repeal the inventory tax; provide for , mandatory retirement of judges, jud-ges, rjrovide for annual sessions ses-sions of the Legislature and increase the pay of legislators legislat-ors to $25 per day while in session and mileage as provided pro-vided by law. A rumor that Dow Chemical Chem-ical Co. had decided to build its electrolytic refinery near Seattle for producing metallic metal-lic magnesium from magnesium magnes-ium chloride it plans to produce pro-duce from Great Salt Lake brines drew hot comments Jan. 19 around the State Capitol. , Milton L. Weilenmann, executive ex-ecutive director of State Development De-velopment Services, who is considering running for the' U. S. Senate or House, said: Many Benefits "This would mean that the Pacific Northwest will get the added tax base, the improved im-proved schools and the increased in-creased employment, while Utah would only have mora of its resources depleted. "I don't think there is any question but that Utah Power & Light Co. would have to take its share of blame for losing this industry. "It is time we stopped living liv-ing in the past and start planning plan-ning for the future." Jay R. Bingham, executive director; Natural Resources, said he is for private enterprise enter-prise but that he considers the electric power industry to be a monopoly. "Crude Threat" The Tooele County Commission Com-mission said the UP&L announcement an-nouncement that electricity rates could increase 21 per cent if the Columbia River power reaches Utah for industry in-dustry "a crude unwarranted threat to keep low-cost power from us." But the Sale Lake Area Chamber of Commerce Board of Governors Jan. 16 unanimously unani-mously refused to support the Magnesium Project request re-quest for help in getting low cost power into the Great Salt Lake area to help refine re-fine chemicals processed out of lake brines. Grand county's Commissioners Commis-sioners took a similar stand. |