Utah 'Tax Freedom Day' is April 11

WASHINGTON — Typical Utahns must work 101 days this year to pay all their federal, state and local taxes, according to a new Tax Foundation report.

That means Tax Freedom Day will not arrive in Utah until April 11, or two days later than the national Tax Freedom Day of April 9 this year. That is when typical taxpayers will have worked long enough into the year to pay all their taxes, if they had not spent any of their earnings since Jan. 1 on anything else.

And the news worsens.

Taxes now cover only about 60 percent of current federal spending, and the government is borrowing the rest. So the Tax Foundation says if it figured a "True Cost of Government Day" nationally, it would not arrive until May 17. It says that deficit is being pushed into future years for future generations to pay.

Even while just paying for 60 percent of overall government spending now, "This year, governments will collect more in taxes from American taxpayers than they will pay for their food, clothing and shelter — combined," said Tax Foundation President Scott Hodge.

Among the 50 states, 35 have Tax Freedom Days that are earlier than Utah's.

Kail Padgitt, staff economist for the Tax Foundation, who wrote the report, told the Deseret News that Utah has "kind of a unique position" that causes its residents to work a couple days more than average to pay their taxes.

He blames it mostly on federal income tax brackets coupled with above average income per taxpayer. "Your overall incomes may be slightly above the national average, which increases your federal burden" because of the way tax brackets are formulated.

He said state and local tax in Utah, meanwhile, "has been declining in recent years. The move to a flat tax has helped that and increased the state's overall competitiveness."

On the national level, Hodge said 2010 has one of the earliest Tax Freedom Days of recent years — even though it is a day later than last year — because of tax cuts passed in recent years to help taxpayers through the recession.

But, "If all of the Bush tax cuts were to expire (as now scheduled) on Jan. 1, 2011, that could add between five and six days to the total Tax Freedom Day," Hodge said. He said the new health care reform law could add another two to three days to it as it is phased in.