"Flat Tax Won't Help the Poor"

None by KCPW

Low-income Advocates Call for Tax Rebate

(KCPW News) Governor Huntsman says his newly-approved dual income tax system is just a stepping stone to a more uniform flat tax. He calls the ultimate goal "flatter and fairer." But low-income advocate Sarah Wilhelm says lowering the income tax is not the way to make the system fairer for Utah's poor:

"People below the poverty line don't pay income tax, but they're still getting hit really hard with mostly sales tax, but a little bit of property tax," says Wilhelm. "People at the bottom end of the income spectrum pay twice as much as a percent of their income as people at the top end."

Wilhelm is fiscal analysis director for Voices for Utah Children. Her group is again asking the Utah Legislature to create a tax rebate for low-income families. The tax rebate is known as the Earned Income Tax Credit. It already exists on the federal level.

Wilhelm says it would cost $23 million to offer a state-version of the credit to the 130,000 Utah households that would qualify.

"And that would help reduce the burden of working families. It would give them a rebate on the disproportionate amount of income they're spending on sales and gax and excise taxes," says Wilhelm.

The credit would range from a few hundred dollars to several thousand dollars depending on household size and income. Last year the Utah House of Representatives opted not to consider the proposal.

Email to a friendPosted in KCPW Newsroom and Legislative Coverage. Copyright 2008 KCPW