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Show For O Against Initiative B TAX REDUCTIONS IMPARTIAL ANALYSIS Initiative B reduces four different tax rates: individual income, sales, cigarette, and motor and special fuels. 1. Income Tax The Utah Constitution requires that all 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 reduces re-duces the individual income tax rates on state taxable income from: 2.6 to 2 for individuals with incomes not over $750 and for married persons filing joint returns with incomes not over $1,500; 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; 4.5 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; 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. r.. p Official Ballot Title: M Shall a law be enacted to reduce: I ' (1) the individual income tax rates depending on income, from 2.6 to 2 fr( ' 3.55 to 3, from 4.5 to 4, from 5.45 to 5? from 6.4 to 6, and from 7.35 to 7; ' ' (2) the state sales tax rate by l2- (3) the tax on motor and special fuels h i 5( per gallon; and (4) the tax on cigarettes by 1 1 1 per p, 2. Sales Tax State sales tax is used for the ! operations of state government. A portion is also used to fund education (kindergarten through 12th grade) because there" ' from state income tax is generally not enough. In 1987 the Legist i increased the state sales tax rate by l2.Jn addition to a state1' 1 tax there is a local sales tax. Under current law, on January 1 i I the state sales tax rate will be reduced from 5-332 to 5 to ai" ' the local sales tax rate to be increased by an identical amount &' 1 it to 1. The overall rate paid by consumers will not change. Hot Initiative B reduces the state sales tax rates by an additional making the state sales tax rate 4-12. Initiative B does not change the rates of the local sales t also does not change the public transit tax (paid by residents ' Lake, Utah, Weber, and Davis counties), resort communities taif .' by residents of certain resort towns), or transient room tax (paid by hotel guests). These are all part of the overall sales tax Fiscal Impact 1 State sales tax revenue used to fund general state govenus ' operations will be reduced by $59.3 million. 3. Cigarette Tax In 1987 the Legislature increased-.1 cigarette tax by 11 per pack of cigarettes. Part of this increased designated to fund a prenatal care program. Initiative B reduces!;. tax on cigarettes by 11 per pack from 23 to 12. Fiscal Impact j Cigarette tax revenue used to fund general state governs ' operations will be reduced by $10 million. i i 4. Motor and Special Fuels Tax The Utah Constiit: requires that all taxes on motor fuels be used for highway puip In 1987 the Legislature increased the motor and special fuels tar 5 per gallon. The increase was designated solely for r. |
