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Proposal to Eliminate Personal Tax Exemptions Could Net Utah Schools $400 Million


Democratic State Senator Pat Jones is working on legislation that would eliminate the Utah personal tax exemption given to those who claim someone in their home as a dependent.

The proposed legislation is still in draft form, but in it’s current state would generate $400 million in new tax revenue. It would achieve this by eliminating the Utah personal tax exemption someone can claim when they have a dependent, like children, living with them. Last year, taxpayers could deduct almost $3,000 dollars from their income for each dependent claimed. Democratic Senator Pat Jones of Holladay says because there are so many tax exemptions, what Utahn’s actually pay is well below the state’s 5% income tax rate and that hurts Utah’s underfunded schools.

“And I think there’s a fairness issue there, that we all benefit from a well educated society and I think this makes it so that we are all responsible for raising the bar, if you will, to make sure that our kids are educated properly,” she says.

The new revenue from the elimination of this deduction would be deposited into a restricted fund. It would then be distributed directly to individual school districts. Jones says the increased funding will help create six thousand jobs. But Royce Van Tassell of the Utah Taxpayers Association says it’s one of the worst policies state lawmakers could pursue.

“The state of Utah needs to be a place that invites people to invest their lives and their fortunes," he says. "And a $400 million dollar tax hike is a very good way to tell people to go to the next state.”

Van Tassell also argues that throwing more money at schools isn’t going to necessarily increase achievement outcomes. Jones will present a draft of the bill to education interim committee in October.

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