Utahns 'free' from taxes Tuesday

Published: Thursday, April 13, 2006 3:26 p.m. MDT
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Talk about your double-tax-whammy.

Next Monday you have to file your federal and state personal income taxes.

And Tuesday is Tax Freedom Day in the Beehive state.

The average Utahn had to work from Jan. 1 through April 18 to pay his or her federal, state and local taxes, says the national Tax Foundation, which yearly puts out a report on how long U.S. citizens have to work to pay off their taxes each year.

An average of all states put national Tax Freedom Day on April 26. That's three days later than last year and 10 days later than 2004, said Tax Foundation president Scott A. Hodge.

"Despite federal tax cuts in recent years, rapid economic growth continues to push Americans into higher tax brackets, causing Tax Freedom Day to fall later in the year," Hodge said in a press release.

The Tax Foundation has been doing this report since 1937. And despite the recessions, tax cuts and economic growth, the time it takes working Utahns to pay their tax bill hasn't changed much over the years.

In 1970, the foundation said Utahns were "tax free" on April 18 — the same date as this year.

Utah has the 16th best Tax Freedom Day, the study found.

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Alabamans got out of the red faster than any other state, satisfying federal, state and local taxes on April 11 this year.

Connecticut, whose nickname is "The Constitution State," was the worst. Those taxpayers won't reach their Tax Freedom Day until May 12.

Utah's ranking pleased Gov. Jon Huntsman Jr., who said Utahns will be even better off if legislators ultimately adopt his rate income tax plan.

"We can do better and we will do better. This becomes a more relevant measure than ever before for a state because if you fundamentally believe capital is a coward and it flees those markets that have excessively high rates, then you're going to lose in terms of developing the economy," Huntsman said. "We need to recognize that and improve our current standing. Because it has everything to do with trying to attract capital."

Various studies have shown over the years that per household, Utahns carry one of the higher tax burdens in the West. A per household measurement is a more accurate calculation, experts say, because Utahns have more children on average than any other state.

A recent U.S. Census study shows that per capita — counting each person in a household — Utah ranks 38th in state tax burden. Each Utahn carries a yearly state tax and fee burden of $1,897, the Census Bureau says.

Include local taxes and fees with state taxes, and the Tax Foundation says each Utahn pays $3,261 annually.

The 2006 Utah Legislature reduced by 2 percentage points the sales tax on unprepared food. That $70 million tax cut takes effect Jan. 1. It should save the average Utahn around $75 a year.

The last day of the 2006 Legislature, the House balked at adopting Huntsman's "fairer, flatter" state income tax reform. The governor was going to call a mid-May special session to take up the matter again. But Wednesday it was learned that the plan — originally supposed to cost $70 million — would cost more than $100 million. And Huntsman junked the special tax session, at least for now.

With the food sales tax down and legislators at some point also cutting state income taxes, Utah's Tax Freedom Day in 2007 may just be a few days earlier than April 18.


Contributing: Lisa Riley Roche

E-mail: bbjr@desnews.com

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