One tax reform proposal floated by legislators Wednesday would reduce income taxes for most Utah taxpayers, but people who don't own homes could see their taxes go up -- particularly if they're single.

The increases would be mitigated somewhat if proponents are also successful in repealing the sales tax on food. And, the bill's sponsor said, the legislation is likely to be debated and amended extensively in the next six weeks.

Several draft bills, including a proposal to lower the income tax rate, were forwarded to the House Revenue and Taxation Committee Wednesday in preparation for the legislative session that starts next week.

Tax reform is expected to be a major focus of the Legislature this year. Record state revenues and a projected $1 billion surplus has state officials itching to slash tax rates.

Rep. John Dougall, R-Highland, said it appears he'll be sponsoring the income tax reform bill in the legislative session. He and Neil Ashdown, Gov. Jon Huntsman Jr.'s chief of staff, offered several versions of income tax reform to the Revenue and Taxation Interim Committee.

The goal is to reduce the state income tax rate from 7 percent. Proposals outlined Wednesday showed the effect of lowering the rate to 4.8 percent, 4.7 percent and 4.6 percent.

Most deductions would be cleared out as well, although credits for home ownership and charitable giving would remain.

The only comparison available with the current system was for the 4.8 percent level. In that scenario most taxpayers would receive a tax break of between $100 and $350, although for those with six-figure incomes the breaks ranged into the $1,000 to $3,000 range.

In some cases, however -- particularly for those with lower incomes -- owning a home would make the difference between a tax cut and a tax hike.

For example, a single person making $20,000 a year who had no home ownership or charitable giving credits would see a $251 increase in income taxes under the reform plan. With those credits, that same taxpayer would see a $50 tax cut.

The same is true of taxpayers earning $10,000 a year ($142 increase), $15,000 ($212 increase) and $25,000 a year ($192 increase). Married filers without a homeowner credit would also see increases, but not to the same extent.

Huntsman spokeswoman Lisa Roskelley said that while some people might end up paying more in taxes, "it's surely not the majority."

"The majority of people in Utah will receive a tax break," she said. "When you're working with taxes, when you change the formulas, there are exceptions to the rule."

Dougall noted that the legislation is still in an early form and that much remains to be debated. He also said that looking at the income tax numbers doesn't take into account potential savings from removing the sales tax on food, another goal being pursued this year.

"You've got to look on both sides," he said. "If we take off sales tax on food, then any cut on the income tax side won't be as much. If we don't cut sales tax on food," then income tax cuts could be steeper.

A repeal of the sales tax on food would knock about $100 off the tax increases listed for the non-homeowning taxpayers above. Married filers at the same income levels would see estimated net reductions of $150 to $600 if the food sales tax is repealed.

At the same time, Dougall added, the "harsh reality" is that tax policy can "incentivize" some economic choices, such as home ownership.

"That will be part of the debate," he said. "All of this is estimates, and we're trying to pick different things to estimate what it's going to be like."

Under one state income tax reform proposal discussed Wednesday, single taxpayers who could claim neither home ownership or charitable deduction credits would see tax increases.

AGI Current Reform Difference

$10,000 $63 $205 +$142

$15,000 $358 $570 +$212

$20,000 $684 $935 +$251

$25,000 $1008 $1200 +$192

$35,000 $1655 $1680 +$25

Taxpayers at the same income levels who owned homes would see taxes decrease.

AGI Current Reform Difference

$10,000 $63 $0 -$63

$15,000 $358 $270 -$88

$20,000 $684 $635 -$49

$25,000 $1008 $900 -$108

$35,000 $1667 $1342 -$325

AGI: Adjusted Gross Income

Source: state Office of Legislative Research and General Counsel

This story appeared in The Daily Herald on page A1.