SALT LAKE CITY — A Utah lawmaker called the state's flat income tax a "disaster" Friday, while proposing legislation that would collect more money from the wealthiest Utahns.
Sen. Jim Dabakis, D-Salt Lake City, said the current 5 percent income tax has cost schools hundreds of millions of dollars since it was enacted a decade ago.
"This was a giant sucking sound from our classrooms and our school children right up to Mitt Romney and the richest 1 percent of Utahns," Dabakis said.
Under S.B. 104, the income tax would be raised to $12,500 plus 6 percent of state taxable income greater than $250,000 for residents who earn between $250,000 and $1 million.
Residents who earn more than $1 million would pay $57,500 plus 7 percent of state taxable income greater than $1 million.
"We tried it; flat tax didn't work," Dabakis said. "It's been a disaster."
Republicans KSL talked to Friday weren't optimistic about the legislation's chances.
"I would be surprised to see it even move from the Senate to the House," said Rep. Dan McCay, R-Riverton, who chairs the House Revenue and Taxation Committee.
McCay said he is concerned by the number of exemptions to the flat tax, but he also said the tax worked through the Great Recession and continues to work.
"For the most part, the economy did well in Utah, and you can largely attribute a lot of that to predictability in the tax system," McCay said. "Changing away from that, I think, is going to be an extremely difficult policy consideration for us to make, as the economy is doing so well."
Though not a proponent of the Dabakis legislation, Sen. Todd Weiler, R-Woods Cross, said he recently surveyed constituents and found that many favored some sort of tax increase to support education.
"This is a concept I'm interested in pursuing. I'm not sure that just trying to sock it to the wealthy people is the best way to do it," Weiler said. "We're last in per-pupil funding, so I think every idea to get more funding into education is worthy of discussion.
Dabakis has been looking at other ways to increase money for K-through-12 schools, including increasing the sales tax and ending the sharing of income tax revenue with higher education.
"We're still 50th for funding in education," Dabakis said. "The real family values state would say that's not acceptable. We need to support our children. Education is our core value, and let's do something rather than just yak, yak, yak."
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