Tax bite 25% on family of 5
After Social Security, which is collected by the federal government directly out of a paycheck, most tax dollars go toward various sales taxes, which include all types of food, merchandise, clothing and entertainment.
"In looking at the numbers, most people would be surprised to find out how much they are paying in state and local sale taxes compared to other taxes," said Mike Jerman, vice president of the Utah Taxpayers Association. He said people most often realize the impact property taxes have on their income but don't usually consider how much they're paying in sales tax.
"Sales taxes are largely invisible," he said. Sales taxes are imposed on items people use every day, so the gradual expenditure just adds up.
According to a recent analysis by the pro-business taxpayer advocacy group, a median-income Utah family earns $57,700 in wages and salary and another $4,967 in the form of employer-paid payroll taxes for a total income of $62,667. Of that, 25.3 percent is paid out in taxes every year.
More than 11 percent of the average income goes to Social Security, while 2.9 percent pays state individual income tax for the year and another 2.9 percent is sales tax. Medicare expenses make up about 2.7 percent of that income, while property tax is 2.3 percent, or 55 percent of the assessed market value for a primary residential property, according to the report, which took into account the sales tax cut passed by the Legislature this year.
Other taxes, including auto and gas tax, employment and excise tax, as well as federal individual income tax, make up the rest of the 25 percent paid out to the government each year. Most median-income Utah families with three or more young children pay little or no federal income tax, mainly due to the $1,000 per child tax credit and personal exemptions.
"Taxpayers should know how much they are being taxed," Jerman said.
Jerman said sales tax is added on to nearly every purchase, including bills, utilities and maintenance services performed on homes and vehicles. That includes telephone and cable TV service, items consumers don't usually think about adding tax to.
The numbers in the report are for the typical Utah family and can differ according to the number of people in a family, as well as the combined household income. Jerman said it gives everyone a good model to look at when determining purchases and paying taxes. For more information on the report, visit www.utahtaxpayers.org.
Contributing: Leigh Dethman
E-mail: wleonard@desnews.com
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