The Utah Legislature is currently considering a bill which if passed, it is estimated, will incent 80% of Utah taxpayers to choose a 5% flat tax rate. Some legislators, particularly those of the LDS faith, are worried that a flat tax might discourage charitable giving. I hope not. But I could see how a poorly crafted flat tax would have just that effect.
The Deseret News says of the LDS church's position on a flat tax:
LDS Church leaders have said that whatever personal income tax changes are made, there should still be incentives for charitable giving.
In September of 2005, a legal representative for the LDS church read a statement in front of a legislative committee. It said in part:
"Our community is best served by providing tax incentives for the support of charitable activities," said Jon Butler, a lawyer who read the church statement. "Charitable contributions help provide for society's poor and needy, fund education and the arts, and meet other important social needs beyond the reach of government resources."
At the time (and probably currently) the average tax rate for Utahns was 7%. People have interpreted that statement, apparently, to mean that the LDS church does not prefer a flat tax. I don't hold that interpretation. I think the LDS church would prefer not to have a flat tax rate that is so high that it would bite into the average family's ability to provide charitable contributions. I agree with the statement that "charitable contributions help provide for...important social needs...". The incentives that government should provide for charitable giving are, in my opinion, those where government doesn't take all our money for us and try to provide governmental remedies in the place of those that should be charitable.
In that light, I support the current tax proposal found in Senate Bill 223. It will make the tax burden on most Utah families much less complex and confusing. It will also leave room for charitable giving. I trust that most Utahns' current reason for charitable giving is NOT that they are trying to find a tax break. I therefore trust that charitable giving in Utah will still be robust (and likely even more than now) under a flat tax.