Eliminate Tax Credits for Children? One Lawmaker Says Yes

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In 2010, Utah spent an average $6,064 per student in public education, putting it dead last when compared to the other 49 states and Washington, DC. On Wednesday, one state senator made a proposal that would change that.

Senator Pat Jones (Democrat-Salt Lake City) is proposing legislation that would add millions into Utah’s education coffers by eliminating tax exemptions for individuals who claim children on their tax returns.

Currently, 100 percent of Utah’s income tax goes directly towards education. According to Jones, that means the heaviest burden of paying for neighborhood schools is falling on families with no children while those with children are receiving the extra credits and not paying into the system they’re using the most.

“33 percent of Utahns pay no state income tax. The cost has shifted to those who pay income taxes,” said Jones.

Jones cited a report from the Fiscal Analysts department at the State Legislature, which says that while the average tax rate for a Utahn is 5 percent, the effective tax rate (what people actually pay) lies somewhere between 1.5 percent to 4.2 percent, depending on what exemptions you claim. The new proposal would essentially broaden Utah’s tax base to an effective rate between 2.6 percent and 4.8 percent.

Senator Stewart Reid (Republican – Ogden), chairman of the Education Committee, had some reservations about the proposed bill’s distribution of funds collected through the removal of exemptions for children, recommending instead that the funds be overseen by the State Board of Education to ensure that schools are meeting the legislature’s standards in order to receive the funding. Jones’ proposal would boost revenue for schools at a stepped rate base on population: $400,000 for elementary, $700,000 for middle schools/junior highs and $1,000,000 for high schools annually.

Representative Steve Eliason (Republican – Sandy) claims the bill would unfairly punish citizens for having children, because children are already a “large financial investment” on parents. “I have six children, one of them would qualify as a student with a disability, so that would be seven exemptions, that turns into about a thousand dollars a year” said Eliason “[…] my concern is that the families that are at this time bearing the greatest expenses of raising children, are the ones who will fund this solely.”

Jones countered Eliason’s argument, “Our values are also quality education in our state, and personal responsibility in our state, and what you’re saying is families that have six children won’t understand the importance of education being subsidized by those who do not get the exemption.”

The idea of removing the tax credit related to children is a controversial one in Utah, as the state leads the nation in children per household. Jones announced in July of this year that she will not be seeking reelection in 2014, so the legislative session beginning in January will be her last.

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