Utah Foundation releases A Lighter Load: Utah’s Changing Tax Burden. The report looks at data over a 24-year span from 1993 to 2016 (the latest data available) and calculates Utah’s tax burden as a ratio of governmental revenue per $1,000 of personal income (the proportion of Utahns’ earnings that are used to fund local and state governmental services).
It finds that Utah’s tax burden has seen a strong decline since 2007. While the property tax burden has remained fairly steady, the burden of all other taxes and fees has decreased sharply, leaving Utahns with a higher share of their income.
Key findings of the newest report include:
Utah’s tax burden in 2016 was the lowest in 25 years, at $103.86 per $1,000 of personal income.
In 2003 and 2004, Utah had the sixth highest tax burden in the nation. By 2016, it had fallen to 31st.
Utah’s falling sales tax burden was responsible for one-third of the total decline from 2007 to 2016.
A primary factor in Utah’s falling tax burden is rising personal income. Utahns’ total personal income increased by 51% between 2007 and 2016, the third-fastest increase in the nation.
About one-third of the growth in personal income is from population growth, while two-thirds is from growth in per capita personal income. However, inflation accounts or about half of the increase in per capita income.
Utah’s property tax burden is the only component to have increased from 2007 to 2016.
Utah’s motor fuel tax burden has eroded since 1998 due to inflation and improved fuel efficiency. During the past decade, Utah saw one of the nation’s largest drops in fuel tax burden.
Utah Foundation President Peter Reichard said the driving force behind the declining burden is good news for Utahns’ finances. “Personal income is rising, and citizens are keeping more of what they earn,” Reichard said. “However, population growth is also a driver, and maintaining public services and infrastructure in the face of that growth can be a fiscal challenge.”