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SALT LAKE CITY — Many are likely feeling the effects from Monday's Tax Day as a new report by the Utah Taxpayers Association shows that a typical family in Utah pays an average of 24.75% of their income in taxes each year.
That means out of an eight-hour workday, the typical taxpayer will work just under two of those hours to pay taxes.
While federal income tax and state income tax rates fell, property taxes have increased since 2020, the report notes.
"Taxpayers might be surprised by the amount of taxes that they pay in the various areas of income, property, sales and payroll taxes," Rusty Cannon, president of the Utah Taxpayers Association, said in a news release.
He said the highest tax burden "by far" remains federal Social Security and Medicare taxes, which make up more than 56% of a typical family's tax burden.
In its second annual report of the kind, the association breaks down the tax burden of the "Bob and Brooke Beehive" family of five, designed to represent an average family in the state based on data from the U.S. Census and the Utah Tax Commission. Bob Beehive is an advertising agent who made $57,515 last year, and Brooke Beehive made $26,574 as a part-time real estate agent.
That hypothetical family makes $84,089 per year, as well as $1,800 paid into a 401(k) retirement plan that won't get taxed until it's withdrawn in the future, according to the taxpayers association.
The Beehive family paid a total direct tax bill of $16,237.58 in 2021, or 19.31% of their household income. Indirect taxes paid by their employers totaled $4,577.21, just over what would be 5% of their income. The total amount paid is $20,814.79, or $1,734.57 per month.
The Beehive family would receive a $2,321 tax refund, the report notes. A breakdown of where all the family's tax money is going, according to the report:
- Social Security/Medicare: $8,465, or 36.6%
- Payroll taxes: $4,577, or 19.8%
- Property taxes: $3,515, or 15.2%
- State income taxes: $3,042, or 13.1%
- Sales tax: $2,322, or 10%
- Auto taxes: $1,030, or 4.5%
- Excise tax: $183, or 0.8%
In 2020, the Utah Taxpayers Association says the typical family paid a lower property tax total of $3,461, which was 14.8% of the family's total taxes.
With a home valued in 2021 at $465,000, the family would pay a property tax rate of 0.013745 based on the Salt Lake City rate. Of that $3,515, 35% went to the local school district, 14% went to the county, 29% went to the city and 21% went to the special service districts such as water, public safety and sewer system, according to the report.
Recent rising property taxes due to increased property value has placed a burden on many residents, leaving as many as 40,000 Utahns living on low and fixed incomes strained to make property tax payments, the Kem C. Gardner Policy Institute said in February.
Of the $1,030 in auto taxes, the majority ($689) went to gas taxes, while $220 went to uniform age-based fees and $88 went to registration fees. Other small fees comprised the rest of the auto taxes.
Finance website the Balance notes it's difficult to nail down the rate paid by the "average" taxpayer in the U.S. due to the progressive tax system in which people pay based on their income and other factors.