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Utahns' tax burden less than most in U.S.

Published October 23, 2012 1:04 pm

Taxes • Rate as a percentage of income dropped in 2010 from 2008-09.
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The tax burden on Utah residents is decreasing over time — and is now a bit lighter than for most Americans, according to a report released Tuesday by the Tax Foundation, a Washington-based research group.

It says Utahns paid 9.3 percent of their income in state and local taxes in fiscal 2010, down from 9.6 percent in 2009 and 10.0 percent in 2008.

Utah's tax burden ranked 29th highest among the states in 2010 (the most recent year calculated), an improvement from 26th the previous year. As recently as 2000, Utah had the ninth-highest tax burden among the states, the report said.

Tax Foundation data show that as a percentage of income the burden in Utah also had been higher than the national average in recent decades, but finally came in lower than the average in 2009 and 2010. The national average in 2010 was 9.9 percent.

Elizabeth Malm, an economist with the foundation, said Tuesday that "both taxes paid and income for Utah decreased" in fiscal 2010 amid tough economic times, but "the decrease in taxes was more pronounced. This resulted in a lower burden rate."

The foundation figures the tax burden by dividing the income of all residents of a state by the total state and local taxes they pay. The taxes paid are not necessarily to their own state.

For example, Alaska raises 70 percent of its tax revenue from taxes on oil drilled there — but that is paid by residents of all states through higher prices on gasoline. Tourist-rich states such as Florida raise much of their sales taxes from visitors. So the foundation tries to figure how much every state shares in such taxes.

The foundation figured that Utahns paid $3,181 per person in state and local taxes in 2010, but $955 of that actually went to other states through "pass-along-taxes" such as increased costs of goods they bought because of taxes elsewhere.

The report said New York residents had the heaviest tax burden, at 12.8 percent of their income, followed by New Jersey, 12.4 percent; and Connecticut, 12.3 percent.

The lowest tax burdens were in Alaska, 7.0 percent; South Dakota, 7.6 percent; and Tennessee, 7.7 percent.




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