Two new reports paint a mixed picture of Utah’s tax and economic policies. Despite leading the nation on the ALEC-Laffer State Economic Outlook ranking, Utahns’ overall tax burden remains one of the highest in the nation, as measured by a new report from the Tax Foundation of Washington, DC. Utahns’ tax burden is still 13th highest in the country.
The Tax Foundation’s latest report calculates “Tax Freedom Day” as the date on which Americans have earned enough to pay their full federal, state and local tax burdens. The later in the year a state’s Tax Freedom Day falls, the higher a state’s tax burden. Utah’s Tax Freedom Day is April 13, making it the 13th latest Tax Freedom Day in the nation, and the latest Tax Freedom Day of the Rocky Mountain states. Despite Utah’s reputation as a politically conservative state, Utah taxpayers work 103 days before they have paid off the tax man.
According to the Tax Foundation report, Washington state (April 16) and California (April 20) are the only states west of the Mississippi with later Tax Freedom dates than Utah. Tax Freedom Day for New Mexico is April 2. Wyoming’s Tax Freedom Day is April 5, Nevada’s is April 8, and Idaho’s and Colorado’ is April 12._Despite this poor showing in overall tax burden, Utah’s business climate remains vibrant. The new ALEC-Laffer study evaluated all 50 states based on 15 policy factors, including sales tax bur-den, property tax burden, right to work status, workers compensation costs, and tax or expenditure limits. Based on their analysis, Utah enjoys the top economic outlook in the country.
The list of other top performing states indicates just how important it is for Utah to continually improve its business climate. Three of Utah’s neighbors, including numbers two and three, are in the top 10 list._The Tax Foundation study suggests one tax policy Utah elected officials should look at. Some Utah legislators and local officials seem willing to allow or enact ever more sales tax increases, like county- and city-option ZAP, RAP and transit sales taxes. As the Tax Foundation report notes, “some taxes are less apparent to the taxpayer. . . because they are difficult to total up. Foremost among these less well-known taxes are sales and excise taxes . . . that raise the prices of nearly all goods and services.”
Despite the fact that the average Utah family pays more in sales taxes than they do in property-taxes, some legislators and local officials are willing to continually push Utah’s sales taxes ever higher; some officials have even admitted that Utah’s sales tax could soon be 10 percent. These bou-tique tax increases hinder Utah’s economic competitiveness.
The Tax Foudation report should serve as a wake up call to all Utah elected officials: Utahns can-not wait until April to start taking their own money home. And the ALEC-Laffer report emphasizes how little margin for error Utah has. To remain competitive with our neighboring states, Utah must continually improve its economic climate.