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Plan to up taxes on rich to boost education dies
First Published Mar 04 2013 06:30 pm • Last Updated Mar 04 2013 11:07 pm

Robin Hood apparently would not be popular in the Utah Legislature. Lawmakers shot down efforts Monday to raise taxes on the rich — and also on oil and gas companies — to give more to education.

The House Revenue and Taxation Committee rejected HB225, which would have provided an estimated $113.8 million more a year for education by raising taxes by that much on the rich.

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"People recognize that the people with greater ability to pay should pay more," said Rep. Brian King, D-Salt Lake City, sponsor of the bill. But Connor Boyack, president of the Libertas Institute, said, "I view this as a discrimination bill" against the rich, and said it would hurt state economic development.

Utah’s income tax — which goes entirely for education — now is 5 percent of taxable income. King’s bill would have raised that to 6 percent for income between $250,000 and $1 million, and 7 percent for amounts more than $1 million.

King said he finds it hard to accept arguments that Utah is overtaxed "when we struggle each year just to do basic things like lower the class size" — and said lawmakers are "cowardly" in fearing retribution from voters for tax increases for education.

The same committee also voted down HB98, also sponsored by King, which would have raised an extra $76 million a year for schools by raising severance taxes on oil, gas and minerals. King said Utah severance taxes are among the lowest in the nation.

But Lee Peacock, with the Utah Petroleum Association, had testified it could decrease the number of wells and production in Utah, where production is more expensive and complicated than in neighboring states. He said such a hike could shift production to other states, and hurt Utah’s economy.

The Utah Education Association favored the hike saying it could help decrease class sizes, and help increase student achievement.

While the bill was rejected, the committee recommended that the issue of raising severance taxes for education be studied later this year in interim meetings.




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