Estimated read time: 3-4 minutes
This archived news story is available only for your personal, non-commercial use. Information in the story may be outdated or superseded by additional information. Reading or replaying the story in its archived form does not constitute a republication of the story.
SALT LAKE CITY — A "typical" family in Utah with a combined income of $86,612 pays 23% of its income in federal, state and local taxes each year, according to an annual report by the Utah Taxpayers Association.
The Beehive Family report, released Tuesday, illustrates the tax burden of a hypothetical family of five, with two income earners. The family was compiled using data from the U.S. Census Bureau and the Utah State Tax Commission.
"We are excited to once again provide this report to help educate and inform taxpayers, policymakers and elected officials about what the typical family pays each year in the various categories of taxes that we have in Utah," Rusty Cannon, president of the Utah Taxpayers Association, said in a news release.
"In 2022, relative to the previous year 2021, this typical family saw a reduction in state income taxes due to recent legislation and a property tax increase due to a higher valuation on their home and some tax increases by local government," Cannon continued. "They also saw a large increase in their federal income tax due to the lowering of the federal child tax credit after the temporary boost in that credit during COVID expired."
What the typical family pays
The hypothetical Beehive family makes a combined total of $86,612 per year, with one parent, "Bob Beehive," employed full time as an advertising agent and his wife "Brooke" as a part-time real estate agent. The family also paid $1,800 into a 401(k) retirement account, which is not taxed until it is withdrawn.
Based on their earnings, the typical family paid $20,067.34 in direct taxes in 2022, and their employers paid $4,749.18 in payroll taxes and workers' compensation insurance, according to the report.
That means the family paid 23.17% of its annual income in direct taxes, according to the report. Here's where its taxes went:
- $8,718 in Social Security and Medicare taxes
- $3,683 in property taxes
- $3,043 in state income taxes
- $2,522 in state sales taxes
- $1,037 in auto taxes
- $887 in federal income taxes
- $174 in excise taxes (for alcohol and tobacco, based on average consumption in Utah)
The Utah Taxpayers Association included employer taxes in the family's overall tax burden of $24,817.18, although employer taxes aren't directly paid by families. The group argues that employer-paid taxes are passed on to employees indirectly through lower wages.
Compared to last year, the typical Utah family will pay around $4,000 more in taxes this year, driven almost entirely by the reduction in the federal child tax credit, according to the report. The expanded credits, which were part of President Joe Biden's $1.9 trillion COVID-19 relief package, were cut in 2022 and are now only available to the lowest earners.
The Beehive family also received a $168 increase in property taxes — due to a nearly $100,000 increase in home value — and a 3% increase in gross income, according to the report.
The new report also reflected a decrease in the state income tax rate from 4.95% to 4.85%, which lawmakers approved in 2022. The Utah Legislature approved a further income tax rate cut to 4.65% this year, which will show up on next year's tax returns.
