Federal reforms in 2017 eliminated the $3,038-per-dependent state tax exemption that helped lower tax bills for Utahns earning up to about $150,000. As a result, lower- and moderate-income households that benefited most from the tax credit will pay more in state tax.
At the same time, the nominal state income tax cut, from 5 percent to 4.95 percent, “disproportionately benefits high-income earners,” said Peter Reichard, president of the Utah Foundation, an independent policy group. That leaves the state with “a slightly less progressive (tax) structure … and Utah doesn’t have a strongly progressives structure to begin with,” he said.
Utah’s top earners account for the lion’s share of state income-tax revenue. The top 20 percent of filers, those earning about $98,000 or more, produce two-thirds of the total take. On an individualized basis, though, savings Utahns will see from the tax cut seems small: Someone earning $100,000 will take home just $50 more.
