DAVE & DUJANOVIC

Amid rising prices, should Utah dump state income tax?

May 6, 2022, 5:23 PM

The federal tax filing season has begun. And it's going to be tough sledding for the IRS -- and for...

The federal tax filing season has begun. And it's going to be tough sledding for the IRS -- and for some tax filers -- given the millions of returns from last year that still have to be processed, staffing issues due to Covid-19 and a lack of needed funding for the agency. Photo credit: Adobe Stock

SALT LAKE CITY — As the price of gas and groceries climb, so do the sales taxes consumers pay. As the price of real estate in Utah rises, so do the property taxes homeowners pay. Two of the Beehive state’s neighbors pay no state income tax. Is it time Utah joined them? A state senator and a taxpayers’ advocate debate cutting the tax burden in the state.

Meet Bob and Brooke Beehive and their three children. The fictitious Utah family earns about $84,000 a year and pays almost 25% ($20, 790) of their income in taxes.

The Utah Taxpayers Association releases a report each year showing the annual tax burden that a typical Utah family pays based on current tax policy and tax rates for the (2021) tax year.

Utah income tax: save it or shrink it?

Rusty Cannon, president of the Taxpayers Association, joined KSL NewsRadio’s Debbie Dujanovic and guest host state Sen. Todd Weiler to talk about the state and federal tax burden, what it funds and where it goes.

“How do you justify that? As a senator — you’ve been a senator for a long time. A good chunk of that is state income tax that they’re paying,” Debbie asked Weiler, referring to the fictional Beehive family.

“Well, yeah, and that state income tax goes to support the schools,” he said. “The constant refrain that we’re hearing is, ‘Oh, we don’t want to be 49th or 50th in per pupil spending. You need to increase the spending.'”

Up until two years ago, Weiler said all income taxes went to fund state education. But now state income taxes are shared with social services.

“[Social services] used to be 10% of our budget. Now it’s 20% of our budget, just in one decade,” he said.

Utah has a flat income tax rate of 4.95% while neighbors Nevada and Wyoming both have no state income tax, according to the Tax Foundation.

Cannon pointed out during the previous session the Legislature cut the state income tax by 0.10%.

“Idaho just cut their rate half a percent,” he said.

“We’ve cut our rate twice in the past three years,” Weiler said, “and it wouldn’t surprise me if we cut it again next year.”

Social Security and Medicare’s big bite

The Social Security Act was signed into law by President Roosevelt on Aug. 14, 1935. Social Security taxes were first collected in January 1937, with workers and employers each paying one percent of the first $3,000 in wages and salary.

 For the Beehive family, 56% of their total tax burden goes to Social Security and Medicare, Cannon said.

“That’s a massive amount of taxes. It’s 15.3% of your gross income every year. If you’re self-employed, you pay it all. If you’re employed, you pay half (7.65%) and your employer pays half,” he said.

“Those systems are not healthy, and it’s taking a lot of money from folks,” Cannon said in closing.

 

Dave & Dujanovic can be heard weekdays from 9 a.m. to noon. on KSL NewsRadio. Users can find the show on the KSL NewsRadio website and app, as well as Apple Podcasts and Google Play.  

Read more:

We want to hear from you.

Have a story idea or tip? Send it to the KSL NewsRadio team here.

Dave & Dujanovic

buildings are destroyed following an earthquake...

Curt Gresseth

Great Utah Shakeout: How to make your home earthquake-safe

An adviser discusses how to make your home safe for the Great Utah Shakeout.

1 day ago

An old, white house sits in front of a blue sky....

Tammy Kikuchi

Instances of squatting in Utah are rare, but they happen

While Utahns have many legal protections to fight against squatters, it can still happen. Here's what to do, if it does.

1 day ago

bald eagle...

Curt Gresseth

Who shot, killed bald eagle near Cedar City? $10,000 reward available

A $10,000 reward is available for information leading to the conviction of the perpetrator who shot and killed a protected bald eagle near Cedar City.

5 days ago

subscriptions...

Curt Gresseth

New Utah law targets auto-renewal subscriptions

A new Utah law says companies now have between 30 and 60 days to notify subscribers of their upcoming automatic renewal.

7 days ago

earthquake...

Curt Gresseth

Are you ready for an earthquake in Utah?

An expert from Be Ready Utah advises during an earthquake, drop, cover and hold on.

8 days ago

bipolar...

Curt Gresseth

Utah doctor shines light on understanding, managing bipolar disorder

A Utah psychiatry professor speaks about understanding and managing bipolar disorder.

9 days ago

Sponsored Articles

a person dressed up as a nordic viking in a dragon boat resembling the bear lake monster...

Bear Lake Convention and Visitors Bureau

The Legend of the Bear Lake Monster

The Bear Lake monster has captivated people in the region for centuries, with tales that range from the believable to the bizarre.

...

Live Nation Concerts

All the artists coming to Utah First Credit Union Amphitheatre (formerly USANA Amp) this summer

Summer concerts are more than just entertainment; they’re a celebration of life, love, and connection.

Mother and cute toddler child in a little fancy wooden cottage, reading a book, drinking tea and en...

Visit Bear Lake

How to find the best winter lodging in Bear Lake, Utah

Winter lodging in Bear Lake can be more limited than in the summer, but with some careful planning you can easily book your next winter trip.

Happy family in winter clothing at the ski resort, winter time, watching at mountains in front of t...

Visit Bear Lake

Ski more for less: Affordable ski resorts near Bear Lake, Utah

Plan your perfect ski getaway in Bear Lake this winter, with pristine slopes, affordable tickets, and breathtaking scenery.

front of the Butch Cassidy museum with a man in a cowboy hat standing in the doorway...

Bear Lake Convention and Visitors Bureau

Looking Back: The History of Bear Lake

The history of Bear Lake is full of fascinating stories. At over 250,000 years old, the lake has seen generations of people visit its shores.

silhouette of a family looking over a lake with a bird in the top corner flying...

Bear Lake Convention and Visitors Bureau

8 Fun Activities To Do in Bear Lake Without Getting in the Water

Bear Lake offers plenty of activities for the whole family to enjoy without having to get in the water. Catch 8 of our favorite activities.

Amid rising prices, should Utah dump state income tax?