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Gov. Olene Walker's flat income tax proposal is written to avoid running afoul of the LDS Church and its biggest source of income: members' tithing.

The outgoing governor's tax reform task force proposed two flat state income tax rates last week. One rate is based on eliminating tax deductions for charitable giving, mortgage interest and children. The other - leaving those deductions in place - would require a higher rate and an increase in property taxes.

Knowing sensitivities about deductions for tithing, the governor sent three members of her tax advisory team to tell church leaders of her reform proposals early this month.

State Tax Commissioner Bruce Johnson, a task force member, said Walker's two income tax rates simply acknowledge a reality of Utah politics. Sixteen years ago, the church was instrumental in stopping a flat income tax bill. Johnson said task force members are well aware many Utahns consider those deductions sacred.

"We haven't been living in a bubble for the last year," Johnson said. "There was a general recognition that charitable contributions are difficult to get away from."

A majority of Utahns and state lawmakers are members of The Church of Jesus Christ of Latter-day Saints. Active members pay 10 percent of their income in tithes. Utahns lead the nation in charitable giving, donating 7.4 percent of their income, according to The Urban Institute. In 1997, Time magazine estimated the LDS Church collects $5.3 billion a year worldwide in member tithing - 90 percent of the church's income.

Walker's tax plan would shift more of the state's tax burden onto individual taxpayers by cutting corporate income and sales taxes, raising property taxes and charging a sales tax on services. At the same time, Utahns would pay a lower, flat income tax ranging from 4.1 to 4.9 percent. The higher tax rate would be required if the major deductions were retained.

Lawmakers have questioned many of the governor's suggestions, but the idea of eliminating deductions for charitable giving faces even greater obstacles.

"In our culture, it's not going to happen," said Senate President-elect John Valentine, R-Orem. "You have to recognize charitable work and you have to recognize it with tax policy. I don't care whether it's a church or a cultural organization or an education event."

Despite some lawmakers' opposition to Walker's ideas, the governor took pains to accommodate church leaders' feelings. Walker tax task force members Gary Doxey, her chief of staff; Utah Tax Review Commission Chairman Keith Prescott; and Brigham Young University professor Gary Cornia briefed LDS Church leaders about the governor's proposal before it was released to lawmakers and the public. Governor's spokesman Justin Smart said church officials - including Presiding Bishop H. David Burton - raised the issue of charitable deductions and the state's sales tax exemption for charities.

But, "the tax package didn't change based on that meeting," Smart said.

Church spokesman Dale Bills said the organization had no comment Monday.

Walker has acknowledged the problems the lower income tax rate - the one with no deductions - will face in the 2005 Legislature. "We recognize the political difficulties," she said at a press conference when the plan was released last week.

In 1988, then-Rep. Craig Call, a Republican, waded into the political mire of tax reform when he sponsored a bill that would have raised the minimum income tax threshold, eliminated deductions and set a flat tax rate.

The legislation was billed as an income tax reduction for all Utahns. Call's bill passed the Utah House but stalled when LDS Church lobbyist Oscar McConkie mentioned that church leaders were concerned not about tithing, but about the future of other nonprofit organizations dependent on charitable giving, such as the Utah Symphony and Ballet West.

"While the church was only one of a number of charitable organizations, it seemed to have some influence that others wouldn't," Call said. "The church articulated that point of view for a number of charities."

In the end, Call says, his bill was dropped and lawmakers adopted a compromise that left the deductions in place, but still took about 20,000 Utah families off income tax rolls. Church lobbyists might not have to step in next year. Lawmakers already balk at the governor's idea for a lower flat income tax rate without any breaks.

"Do you want to take away an incentive for charitable giving and an incentive for home ownership?" Sen. Curt Bramble, R-Provo, asked. "It's going to be difficult to eliminate."