UTAH'S TAX BITE DIPS A BIT
Almost half of average family's tax outlay goes to Social Security
By Bob Bernick Jr.
Deseret Morning News
The average Utah family pays a fourth of its income in federal, state and local taxes, according to a recent study by the Utah Taxpayers Association.
That is actually a bit less than in recent years, said Mike Jerman, who put the study together for the association, a tax watchdog group mainly funded by businesses.
"We decided to look at taxes paid for 2008, because that's when most of the tax cuts (given by the Utah Legislature) kick in," said Jerman, who recently left his position as vice president of the association to become director of sales for a charter school development firm.
Lawmakers reduced state income and sales taxes by hundreds of millions of dollars over the past several years.
The taxpayers' study found the biggest chunk of taxes � 11.4 percent of the average family's income � goes to Social Security.
Individually calculated, other taxes don't come close to that � with the second-highest taxes, 2.9 percent, each going to state income tax and state and local sales taxes, Jerman found.
Jerman defined the average Utah family as two adults working � one at a full-time job, the other at a part-time job � with three children at home living in a $220,000 house, the median price of a residence in 2006.
All told, the family made $57,700 a year. (The taxpayers' complete study can be found at www.utahtaxpayers.org.)
Jerman also included in the family's wages and salaries the cost that the family member's employer paid in employer payroll taxes.
"That is fair," said Jerman, because economists count the direct employer's payroll cost toward the employee's salary, even though the employee never sees that cash and doesn't pay direct taxes on it.
Sarah Wilhelm, with Voices for Utah Children, said middle-to-low-income people have benefited from the Legislature's recent tax cuts and tax reforms.
"Lowering the sales tax on food was a good start," said Wilhelm, who heads up the group's fiscal analyst unit.
But because low-income Utahns already were paying little or no state income taxes, reductions in that tax didn't help them at all.
"Low-income Utahns are still paying 11 percent to 12 percent of their income in taxes," she said.
And while that may be a smaller percent of their meager income than higher-income Utahns pay in dollar amounts, richer Utahns clearly can afford to pay more in taxes.
"The low-income family doesn't have the money to pay their taxes in the first place," she said.
Jerman said the average Utah family is getting hit by taxes all the time, and they affect all kinds of family actions � from attending school to driving a car.
For the family making $62,667 a year (including the family's employer payroll taxes of $4,967), the family pays $15,877 in taxes � just more than 25 percent of their income.
The most visible of the tax, says Jerman, is the property tax. Renters, of course, pay their apartment owner's property tax through their rent. But homeowners see their property taxes each fall when they write a check to their local county treasurer.
The average family's property tax is $1,437 a year, said Jerman. Most of that ($790) goes to public schools. Assuming they live in a city, $263 goes toward city government, $289 to county government and $95 to special improvement districts � like water or sewer districts.
A lot of Utahns don't notice how much tax they pay for owning and driving a car, said Jerman. That's because outside of their yearly vehicle registration fees, they pay tax at the pump or when they buy a new set of tires and often don't notice taxes then.
Utah's 24.5-cent-per-gallon gasoline tax costs the average family $331 a year, with the federal gasoline tax taking $249 a year, Jerman said.
Other vehicle fees and taxes add up to $913 a year for a two-car family.
Even though the Legislature cut the state's share of the sales tax on unprepared food, the average family still spends a lot of tax dollars on eating, household furnishings, clothing and entertainment.
The average family spends just more than $27,000 a year on such items, paying $1,585 in taxes on them.