Utah one of flattest in federal taxes

SALT LAKE CITY — Utah ranks among states with the flattest distribution of federal income taxes, based on recent findings by The Tax Foundation, an independent, nonpartisan Washington, D.C.-based organization monitoring the tax burdens of Americans.

Using 2008 IRS data culled from more than 1.1 million Utah federal returns, the study found that Utah taxpayers earning under $50,000 collectively earned 23 percent of the total adjusted gross income (AGI) but paid just 10 percent of all income taxes for an effective tax rate of 4 percent (see chart).

At the other end of the spectrum, Utah tax filers reporting over $200,000 in income earned 22 percent of total AGI while paying 46 percent of the income taxes collected, equaling an effective tax rate of 21 percent, according to the more than 1.1 million federal U.S. averages, by comparison, were slightly more progressive. Those earning under $50,000 accounted for 22 percent of total AGI collectively yet paid only 8 percent of all income taxes. That's a 5 percent effective tax rate. Meanwhile, taxpayers earning over $200,000 collectively earned 29 percent of total AGI but paid more than half of all income taxes for an effective rate of 22 percent.

Those in Utah bringing home between $50,000 and $75,000 fared slightly better than either the lowest or highest brackets in the state. Although their earnings combined for an AGI of 18 percent, they only paid 11 percent of all federal income tax obligations for a stingy effective tax rate of 6 percent.

Connecticut and New York are the Nos. 1 and 2 states for having the most progressive distribution of federal income taxes, according to the research.

Connecticut taxpayers earning under $50,000 accounted for 13 percent of the AGI but only paid 5 percent of their income to Uncle Sam. Earners of more than $200,000 generated 44 percent of the Connecticut's AGI but paid 66 percent of its federal income taxes.

West Virginia has the flattest distribution of federal income taxes, the study reported.

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