The Flat Tax - An Idea Whose Time Has Come?

In preparation for our pending move to Utah, I have started following Utah politics through the Salt Lake Tribune and the various Utah blogs. As with many other states, Utah has some new laws that are going into effect with the new year and there was one that really piqued my interest.

Utah's new 5 percent "flat tax" income tax kicks in Jan. 1 and, if politicians' promises prove true, it will be cheaper and simpler for most residents.

One of the fun things about Utah is that the respective House and Senate caucuses (Democrats and Republicans) have caucus blogs! It gives readers an eye into the mindset of the caucus. The Senate Site had a post last month on the flat tax and it gives the readers an eye-opening statistic.

But a new University of Utah study also says that - contrary to conventional wisdom - it also will be somewhat more progressive than the old sliding-scale bracketed income tax.
"Under the new system, upper income families will be paying a larger share of the tax", said Janis Dubno, author of the new study published by the Center for Public Policy & Administration.

In addition to the flat 5% income tax, Utahans are charged a state sales tax of 4.9%. There are no exceptions to the sales tax (as there are in Minnesota) which means that the state still gets their dime, in spite of the reduction in the top tax rate.

The post in the Senate Site even links to the raw data for the policy wonks to digest. Given the promise that the data shows, maybe a single rate tax structure is something that the Minnesota Legislature would want to explore.