I didn’t address volatility, and yes, it’s an important goal. The same objective could be accomplished by not floating down the basic levy while stretching the brackets(providing an increased portion of more stable property tax revenue), or treating a greater portion of ongoing revenues as one-time. Even more drastic approaches might be funding education from sales tax rather than income tax, or directing volatile high-income surpluses to some sort of education investment account. (Don’t construe this list as support or opposition for any of these ideas.) As the saying goes, “There’s more than one way to skin a cat.”

Your motive in providing a more stable funding base for education is both good and valid (and I commend you for it), but it hasn’t been part of the political sales job. I’m not sure other advocates share that goal. Besides, I’m not wholly convinced it will protect public education as you intend. Yes, income tax is volatile, but during down times every program suffers, and in recent lean years the legislature demonstrated its ability to shuffle income tax money by reducing general fund expenditures to higher education.

Utah’s competitive tax position is important, but the graphs I’ve seen only show a partial picture, compare our income tax rates with states that have wildly different approaches to tax policy—some states have no sales tax, others have an extremely high sales tax, some have a very low property tax, other much higher.

Is a single flat tax system our final goal? There was certainly quite a bit of opposition to that idea, as I recall—including from a large religious organization headquartered in the state. That’s a pretty big hurdle to get across.

Also, I haven’t called you on it in previous conversations, but I’m not convinced 12.8% is a truly proper number. I’m not doubting its accuracy, just the context. The number doesn’t account for status quo growth from increased enrollment, and thus doesn’t show the increase relative to the larger student population. A better number to use would be change per-pupil, which is a bit less than 10%, not counting inflation, rising health care costs, etc. Is it odd to you that the take-home salary of many teachers decreased despite the “record” budget?

Two key goals of tax reform are:
1. Provide a more stable, less volatile revenue base for public education
2. Strengthen Utah’s competitive tax position within the region

Implementing a flat tax option which has a lower (top) marginal rate and through which a significant amount of individual income tax revenue will flow is an initial step toward accomplishing those 2 goals (remember that the top 1% of tax filers pay almost 25% of the individual income tax). There is no way to accomplish these goals without some nominal amount of tax cuts initially. Since the economy is strong, now is the time to begin to make this change while simultaneously infusing record increases into public education (12.8% for FY2007, I anticipate that FY2008 will also be significant). I have seen no indication that rebracketing and indexing those brackets will do anything to bring greater stability to individual income tax revenues.

For additional thought, see http://www.dynamicrange.org/2006/08/income_tax_refo.html