Utahns' tax burden, as measured by state taxes and fees paid compared to personal income, increased in 2005-06, a new study shows, with Utahns now carrying the eighth-highest burden among the 50 states.
The good news, says the Utah Taxpayers Association, is that the 2006 and 2007 Legislatures gave $400 million in tax cuts some of those cuts coming in future years. In addition, when fees are excluded from the data, Utah's tax burden doesn't look so bad.
The association, a nonpartisan research group mostly funded by local businesses, routinely does studies of tax impacts on Utahns and businesses located here.
Using the latest available data, association economists say that Utahns' tax and fee burden went from 15.76 percent in fiscal 2005 to 16.08 percent in fiscal 2006.
In part, the increase reflects a better business and job market in Utah during those years. When wages go up, you tend to pay more in state individual income taxes, for example.
While our tax burden may have gone up, Utah's rank fell from the fifth-highest in the nation to the eighth-highest, however. So in comparison, we advanced, association economists say.
Still, having the eighth-highest tax burden in America is certainly not a good thing, the association said.
Take out the state fees, however, and Utahns fare much better.
Utahns' tax burden (not counting fees like public college tuition or drivers' licenses) is only 11.34 percent for 2006, compared to a national average of 11.24 percent. Instead of ranking as the eighth-highest tax and fee burden among the states, Utah ranks 20th more near the middle of the pack.
So, as other association studies have shown over the years, Utah has relatively high fees, compared to taxes, like the state income or sales taxes.
Association officials say it is not only fair, but critical, to include fees in any comparative study. That's because most Utahns do pay some fees each year indeed, some fees, like a business license, are required.
Still, says the association, since 1992 Utahns have still borne a higher tax and fee burden across the board than the national average. And that gap is getting larger, not smaller.
By the 2007 fiscal year data, not yet available, says the association, legislative tax cuts will begin to be felt. And 85 percent of tax cuts come to individuals, not businesses.So the tax and fee burden study that comes next year should show, hopefully, some improvement for Utah taxpayers.
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