Detailed description of the 7 tax cut options in the survey above:
| Tax Cut Options | How big is it? | Who Benefits? | Status in 2021 Legislature and Additional Comments |
| A one-time Utah tax rebate to low-income households -- $200 per person (including both adults and children) for the fifth of households earning under $30,000 | $80 million | This would be a state version of the $1200 tax rebates in the March 2020 federal CARES Act, targeted to the lowest-income one-fifth of households. | |
| Utah tax rebates to low- and moderate-income households -- $100 per person (including both adults and children) for the two-fifths of households earning under $50,000 | $80 million | This would be a state version of the $1200 tax rebates in the March 2020 federal CARES Act, targeted to the lowest-income two-fifth of households. | |
| “Utah EITC” -- A state version of the popular federal refundable earned income tax credit (EITC) for lower-income working Utahns. The state version would be equal to 10% of the federal EITC | About $300 per family. Total = $50m if it's accessible for all Utah EITC recipients or $7m if it's just for Utahns working their way out of intergenerational poverty (IGP). | Full EITC population is 170,000 Utah households earning less than $50,000, most with kids. The IGP population is about 22,000 households. | 29 other states have a state EITC. The IGP EITC is HB 309 this year and was passed in December 2019 as part of the ill-fated tax restructuring law that was repealed. |
| Military retirement and Social Security tax credits targeted to high-income retirees (non-refundable*) | MIlitary pension tax credit: $24 million total, $1300 per household. Social Security tax credit: $18 million total, $300 per household | 70% of this Social Security tax credit and 90% of this military pension tax credit goes to high-income retirees. None goes to low- or moderate-income retirees since they already have no state income tax liability. See https://utahchildren.org/newsroom/speaking-of-kids-blog/item/1111-analysis-of-retirement-tax-credit-proposals for more details. | This is the proposal in SB11, which passed the Utah Senate in the first week of the 2021 legislative session. |
| Military retirement and Social Security tax credits targeted to low- and moderate-income retirees (refundable*) | Same total as above, but the amount per household would be lower for the military pension credit and it would reach more households. | Only for low- and moderate-income military retirees earning less than $50,000 | |
| Child tax exemption expansion for families to offset the impact of the 2017 federal tax changes (nonrefundable*) | $78m tax cut for families with children, offset by a $40m increase for higher-income taxpayers with no dependents | As a nonrefundable change, this exemption expansion mostly benefits higher-income taxpayers with children. None of it goes to the lowest-earning 30% of taxpayers. | This is the proposal embodied this session in SB 100. |
| Income tax rate reduction -- from 4.95% to 4.75% | $200 million | Income tax rate reductions mostly benefit Utahns with six-figure incomes. The income tax is Utah’s only non-regressive tax, the only one that lines up with the state’s income distribution. That means that 3/5 is paid by the top 1/5, and 4/5 is paid by the top 2/5. The lowest-earning 3/5 of Utahns (those earning less than about $75,000) pay very little of the state income tax. | This is the proposal from the Utah Taxpayers Association |
* Refundable means that it’s like the federal EITC – you get the credit even if it’s larger than what you owe on your income taxes, in which case you get a rebate. Non-refundable means that you only get it to the extent that you owe something, so no rebate is involved.
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At the end of the month we published the results from the hundreds of Utahns who took the survey -- see those at our Tax Cut Survey Results page.
