SB 107: Lowering Income Taxes Using Revenue Triggers
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Post-tax reform new ideas are needed to deliver real tax cuts to Utah taxpayers. An ongoing problem has been the tremendous growth of income tax receipts for the state. Since the 2007 Huntsman tax cuts, the Utah economy has soared and has brought with it a large amount of budget growth as the income tax rate hasn’t strayed very far from 5%.
About a dozen other states use what is called a revenue trigger to automatically lower tax rates when certain benchmarks are met. Senator Lincoln Fillmore is proposing his own version of a revenue trigger in the form of Senate Bill 107. The idea is modest, if the growth rate of income taxes exceeds the growth rate of Utah’s GDP, then the income tax rate would be adjusted to close that gap.
The result should be small gradual cuts in income tax rates over time as Utah’s economy continues to thrive and income tax receipts continue to grow at a faster rate than normal. This should allow Utah to deliver tax relief to taxpayers without jeopardizing existing programs.