OCR Text |
Show For Against r; O O rei( spe Official Ballot Title: Shall a law be enacted to reduce: red pur Initiative n (1) the individual income tax rates, depending on income, from 2.6 to 2, from 3.55 to from 6.4 (2) 3, from 4.5 to 6, and 4, to from 5.45 from 7.35 to 7; the state sales tax rate by TAX REDUCTIONS the tax on motor and special fuels per gallon; and (4) the tax on cigarettes by 1 5, 12; (3) 51 to 11 by per pack? L. CIPASTIAL ANALYSIS Initiative B reduces four different tax rates, individual income, sales, cigarette, and motor and special fuels. 1. The Utah Constitution requires that all Income Tax income tax revenues be used for public education. In 1987 federal and state tax reform changed the Utah income tax base so that it generated more revenue. All of the proposed increase in revenue from this reform was budgeted for public education (kindergarten through 12th grade). In 1988, when actual income tax revenues from the reform exceeded budgeted revenues, the Legislature refunded $80 million and also reduced income tax rates. Initiative B further re duces the individual income tax rates on state taxable income from: for individuals with incomes not over $750 and for married persons filing joint returns with incomes not over $1,500, 2 6 to 2 3 55 to 3 for individuals with incomes between $750 and $1,500 and for married persons filing joint returns with incomes between $1,500 and $3,000, to 4 for individuals with incomes between $1,500 and $2,250 and for married persons filing joint returns with incomes between $3,000 and $4,500; 4 5 5 45 to 5 for individuals with incomes between $2,250 and $3,000 and for married persons filing joint returns with incomes between $4,500 and $6,000, 6 4 to 6 for individuals with incomes between $3,000 and $3,750 and for married persons filing joint returns with incomes between $6,000 and $7,500; and 7 35 to 7 for individuals with incomes over $3,750 and for married persons filing joint returns with incomes over $7,500. Fiscal Impact Income tax revenue used to fund public education will be reduced by $35 million. Page 22 2. Sales Tax State sales tax is used for the gener operations of state government A portion is also used to fund publ education (kindergarten through 12th grade) because the revem from state income tax is generally not enough In 1987 the Legislatm increased the state sales tax rate by 12 In addition to a state sab tax there is a local sales tax Under current law, on January 1, 19t the state sales tax rate will be reduced from 5 332 to 5 to all the local sales tax rate to be increased by an identical amount, takir it to 1 The overall rate paid by consumers will not change Howeu Initiative B reduces the state sales tax rates by an additional 12 making the state sales tax rate 4 12. Initiative B does not change the rates of the local sales tax also does not change the public transit tax (paid by residents of Sa Lake, Utah, Weber, and Davis counties), resort communities tax (pa by residents of certain resort towns), or transient room tax rate (paid by hotel guests). These are all part of the overall sales tax paid Fiscal Impact State sales tax revenue used to fund general state governmer operations will be reduced by $59 3 million. 3. In 1987 the Legislature increased tlx Cigarette Tax cigarette tax by lie per pack of cigarettes Part of this increase wi designated to fund a prenatal care program. Initiative B reduces tin tax on cigarettes by lie per pack from 23e to 12e. Fiscal Impact Cigarette tax revenue used to fund general state governmer operations will be reduced by $10 million. 4 Motor and Special Fuels Tax The Utah Constitute requires that all taxes on motor fuels be used for highway purpose In 1987 the Legislature increased the motor and special fuels tax 5e per gallon. The increase was designated solely for roJ |