This research report finds that the common method of counting all taxes and government fees overstates Utah’s tax and fee burden. A more appropriate accounting of taxes and mandatory government fees is provided, showing Utah ranked 14th highest in the nation with a total burden of $124 per $1,000 of personal income.
In past reports, Utah Foundation has calculated tax burden based on all taxes and fees paid to Utah state and local government. However, many government fees are not mandatory exactions on taxpayers, but are competitively priced, optional services taxpayers may choose to purchase from government or the private sector. The largest of these fees are public college tuition and medical charges at public hospitals. Other, smaller fees in this category include charges for services such as golfing, auto parking, school lunches, and recreation programs.
Because Utah’s college enrollments increased at the sixth fastest rate in the nation from fiscal year 1997 to 2004, the increase in tuition revenues was exaggerating the growth in Utah’s “fee burden.” In this report, Utah Foundation recommends excluding tuition and other optional fees from the calculation of tax and fee burden. Including only mandatory fees along with taxes provides a better depiction of the burdens shouldered by taxpayers. Using this measure, Utah’s tax and fee burden ranking has remained basically flat since 1997, ranging from 16th to 14th highest.
Other highlights from the report include:
- Utah’s tax and fee burden ranks fourth highest among western states, behind Wyoming, California, and Nevada.
- Utah ranks low in property taxes and corporate income taxes.
- Utah ranks fairly high in motor fuel taxes and in mandatory fees.
- Utah’s sales tax burden, which was ranked in the top 10 in past reports, has fallen to 13th.
- Utah individual income taxes rank 17th.
Read this report: