The Legislature's Tax Reform Task Force wound up the summer of 2005 with an innovative plan to replace the state's antiquated tax system with a "flatter" income tax.

Already the momentum toward the adoption of a true flat tax had foundered. But key lawmakers carried the "H3" plan (the third mutation of Gov. Jon Huntsman Jr.'s original flat tax proposal) into the 2006 Legislature. After dozens of re-drafts and recalculations and a final grand compromise - sealed in a news conference on the Capitol Plaza - H3 cratered.

Although the House-supported grocery sales tax reduction passed, the Senate and Huntsman's income tax reform withered on the House floor as the session's clock ran out.

The failure turned out to be the equivalent of slipping on a banana peel as a bullet whizzes by your head. Analysts later discovered the $70 million cost of H3 had been wildly underestimated due to a math error. The true figures would have been at least twice as much.

In a final footnote to Utah's sometimes embarrassing journey to tax reform, the "miscalculated" cost of H3 actually would have matched up with the state's ever-growing surplus. (Conservative House members who thought H3's tax break was too little by half could have safely voted for it.)

When Huntsman quoted The Grateful Dead's "What a long, strange trip it's been" to adjourn the session, he had little idea how apt it was.

Tax reform lite

After what some lawmakers recall as the tax reform "fiasco," Huntsman and his supporters set their sights lower. By the time Utah's fields were greening, an idea of flat-tax guru Steve Forbes was being channeled by Rep. John Dougall, R-Highland.

Whether you call it dual-track or "choose-your-own," the basic theory remains the same: If you can't get a compromise between supporters of a flat tax and those who want to keep the existing system - offer both.

The two-track tax system proposal offers filers the choice of sticking with the traditional system, with broadened brackets - and the same old top rate of 7 percent - or to be taxed under a flat tax rate of about 5.4 percent, with no deductions.

One of the dilemmas that always dogs income tax reform is losers vs. winners. Flatter taxes, shifting brackets and other adjustments in the name of fairness and simplicity tend to create losers, people whose tax, at least temporarily, will increase. The governor and lawmakers soon learned that rumors of even tiny increases got their phones ringing.

At that point, the politicians took tax reform out of the hands of the tax experts who had advised the task force. The political solution is to stretch and twist the tables to prevent anyone from losing, which results in even bigger winners and postpones true tax reform.

Keep in mind that all House members and half the Senate are up for re-election in November.

Republican lawmakers embraced the two-track income tax as a quick way to give the promised $70 million tax cut that was left on the table when the session ended.

And while the dual-track system falls short of the tax reform Huntsman has said is necessary to deal with the tsunami of children coming into the public schools over the next decade, he calls it a first step toward comprehensive income tax reform.

Critics fear the proposed system cuts money from public education (income tax is solely used for schools), on a gamble that the tax cut and flat tax for the rich will accelerate Utah's economic growth.

Though Utah Democrats, like Sen. Ed Mayne and Rep. Roz McGee, call the income tax proposal a "travesty of tax reform" that favors the rich, most of their colleagues probably will support it, because expansion of the tax brackets and adjustment for inflation are things they've long fought for.

The big etc.

Part of the deal that enabled the special session to happen was that it would include legislation to allow Salt Lake County to pay for hundreds of millions of dollars in mass transit expansion with sales tax increases rather than property tax increases.

Nothing, of course, goes through the state political process without getting mauled. The tax measure for mass transit in Salt Lake County quickly became a taxing opportunity for every county in Utah, for just about any kind of transportation need, including roads and airport improvement.

That sounds good to lawmakers who apparently hope their constituents won't notice that the same special session that will give them a $67 a year tax cut, also will allow counties to increase their sales tax.