Even with recent reductions in Utah's sales tax on food, the state still has an unfair, regressive tax system, a long-time tax expert says.

Doug Macdonald was the state's top Tax Commission economist for years before retiring from that post in 2005. He now serves as head of Utah Issues, a nonpartisan advocacy group for low-income Utahns.

Macdonald, who has updated his previous study on tax burdens in Utah, says that while the two-year reduction in the state food tax is laudable, it still doesn't make up for a continuing "unfair" state tax system that sees low-to-middle-income Utahns paying a greater share of their income in taxes than upper-income and wealthy Utahns.

The remaining 1.75 percent state sales tax on food results in the overall tax system harming lower-income Utahns more than middle-to-upper-income Utahns, says Macdonald.

"Recent changes in Utah's tax laws during the 2006 and 2007 legislative sessions have narrowed this (tax) regressivity, but there still will exist a 3 percent higher effective tax rate for the lowest 40 percent of Utah's taxpayers relative to the top 20 percent," Macdonald said in his new tax burden report.

The 2006 and 2007 sales and income tax reforms in Utah have been roughly equal, said Macdonald, but have tended to favor the top 1 percent of taxpayers.

While the monthly tax savings from all these changes may not seem like much, added all together they equal hundreds of millions of dollars a year, Macdonald said.

The tax savings equal about $12 a month for lower-income households— or $144 a year — and up to $34 a month for those making up to $100,000 a year, he said.

The savings increase dramatically for the very wealthy.

"Those taxpayers in the top 5 percent, with incomes from $100,000 to $300,000, will see an $80 per month tax cut. Taxpayers with incomes of $1 million will see a $649 per month tax cut or annually $7,783 in tax reductions," Macdonald said.

When the GOP-controlled Utah Legislature adopted the tax reforms, lawmakers tried to force much of the savings to lower- and middle-income Utahns.

Accordingly, the greatest tax cuts by percentiles went to the lowest 20 percent of taxpayers.

Since wealthier Utahns pay by far most of the income taxes in Utah, lowering the rate from 7 percent to 5 percent meant that those paying the most tax would get most of the benefit.

Still, Utah's working poor — those making $20,000 or less — pay around $600 a year more in taxes than they would in a more "fair" tax system, Macdonald's analysis shows.

"This could be remedied by establishing an Earned Income Credit (in state income taxes) based on 40 percent of the federal credit. For more than a decade Utah Issues has called for the enactment of a significant earned income credit for Utah's working families. We do so again," Macdonald said.