Indeed, the entire Legislature should be commended for following through with what they and others describe as a "first step" toward muchneeded comprehensive tax reform.
As policy makers and state leaders contemplate the next phase of tax reform, the Legislature should take a muchneeded step and establish a state tax credit that increases the financial stability of hardworking, low- and moderateincome families. This state version of the Earned Income Tax Credit, or EITC, is long overdue in Utah.
The federal EITC was established in 1975 and has helped ease the tax burden and raise the income of millions of working families. No government initiative has done more to lift working families out of poverty. President Ronald Reagan called the EITC "the best anti-poverty, the best job creation, the best pro-family measure to come out of Congress."
Only people who are working qualify for the EITC, which reduces a worker's income tax burden and mitigates the sales, payroll and other taxes they and their families pay. In other words, the EITC rewards work. That's why it has enjoyed strong bipartisan support for three decades.
In the three decades since the federal EITC went into effect, 20 states have taken the next step and established a state version of the EITC. From Virginia to Oregon, these state credits have helped working families keep more of their income, providing them an extra measure of economic security. The same would be true in Utah.
The just-passed Utah tax legislation provides modest relief of roughly $50 a year to most Utah taxpayers - maybe enough for a tank of gasoline. A state EITC would direct relief to the roughly 170,000 Utah households making less than $38,000 a year who struggle to make ends meet.
Depending on the size of the credit enacted, working families could see their take-home income boosted by several hundred dollars a year. That would mean a lot to families with nothing to spare in their budgets - groceries for a month or gas for several months.
Passing a state EITC would also help even out a disparity in the burden of state and local taxes paid by working families. Recent studies have found that Utah taxpayers making less than $16,000 paid 11.5 percent of their income in state and local taxes, while those earning more than $280,000, paid only 5.5 percent.
Finally, like the federal EITC, the benefits of a state EITC would boost local economies in every community throughout the state. The federal EITC brings more than $220 million into Utah's economy each year - dollars that are invested locally in meeting needs of working families.
Estimates are that $80 million in federal EITC funds go unclaimed by eligible taxpayers in Utah each year - and a state-based EITC is a proven way to increase utilization of the federal EITC. Consistent with one of the primary goals of tax reform, this would bring tremendous economic benefits to our state.
In keeping with another goal of state tax reform, a state EITC is simple to implement and administer. But most important, it provides meaningful tax relief to those working families who need it most. More than a quarter of all Utah families with at least one working adult are considered low-income. Strengthening the financial stability of these working families should be a state priority.
Now that the special session has ended let's make a commitment to finish our tax work in the months ahead by establishing a state EITC for Utah.
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A. SCOTT ANDERSON is president and CEO of Zions Bank.
