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SPONSOR: |
Heaton |
DATE TYPED: |
|
HB |
26 |
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|
SHORT TITLE: |
Tax Rate Tables Indexing |
SB |
|
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|
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ANALYST: |
Smith |
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REVENUE
|
Estimated Revenue |
Subsequent Years Impact |
Recurring or
Non-Rec |
Fund Affected |
|
|
FY03 |
FY04 |
|
|
|
|
|
(7,800.0) |
(16,200.0) |
Recurring |
General
Fund |
|
|
|
|
|
|
(Parenthesis ( ) Indicate Revenue Decreases)
Responses
Received From
Taxation
and Revenue Department (TRD)
SUMMARY
Synopsis
of Bill
House Bill 26 eliminates
income tax “bracket creep”. Beginning with tax year 2003, personal income tax
rate schedules would be indexed for inflation as measured by the consumer price
index (“CPI”). The indexing would be
accomplished by multiplying the minimum and maximum income amounts for each tax
bracket by a fraction, the numerator of which is the CPI for the current year
and the denominator of which is the CPI for 2002. The resulting income amounts would be rounded
down to the nearest $100, except that that income amount would not be reduced
if the result of the calculation were lower than the prior year’s amount. The Taxation and Revenue Department would
make the necessary adjustment to the tax due amounts to reflect the new tax
bracket amounts.
OTHER SUBSTANTIVE ISSUES
Due to bracket creep, annual personal income tax
revenues increased by over $500 million during the last ten years -- an
increase of over 100 percent. Total personal income received by
SS/prr