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Utah ‘Tax Freedom Day’ next Monday

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Here's some more depressing news for Utahns as many scramble to file income tax returns before Tuesday's deadline: "Tax Freedom Day" in Utah is not for another week.

That is when a typical taxpayer would have earned enough — if they spent no money on anything else — to have paid all their annual federal, state and local taxes.

In Utah this year, that is April 21, or 111 days into the year.

"Americans will spend more on taxes in 2008 than they will spend on food, clothing and housing combined," said Tax Foundation President Scott Hodge, co-author of an annual study that determines when Tax Freedom Day falls.

It could be worse.

Utah's Tax Freedom Day is also two days earlier than the national Tax Freedom Day of April 23. And the national observance actually comes three days earlier this year, mainly because of coming economic stimulus rebates.

"Tax freedom has been a seesaw affair in recent years," said Gerald Prante, the other co-author of the annual study. "In 2000, Tax Freedom Day was celebrated May 3, the latest date ever. Then a string of tax cuts between 2001 and 2003 push Tax Freedom Day up by more than two weeks so that it fell on April 16 in 2003 and April 17 in 2004."

But, he added, "For the next three years, incomes and tax collections soared, pushing Tax Freedom Day back to April 26 in 2007. Now the stimulus rebates and a projected slowing of income growth have made Tax Freedom Day come three days earlier."

On average nationally, Americans this year must work 74 days to afford their federal taxes, and 39 days more to pay state and local taxes.

In comparison, the study says that buying food for the year requires 35 days of work, buying clothing requires 13 days, and paying for housing requires 60 days. Also, it said Americans must work about 50 days to pay for health and medical care, 29 days to pay for transportation and 21 days for recreation.

Americans face many different types of taxes, but income tax takes the biggest bite, the study says. The average American must work 42 days to pay income taxes (with 32 of that for federal, and 10 for state and local income tax).

Social insurance taxes (such as for Social Security) take the next biggest bite: 28 days. Sales taxes take 16 days. Property taxes require 12 days. Corporate income taxes (passed on to consumers) take 13 days. Gift/estate taxes and other forms of tax require a day each.

The Tax Foundation study says taxes now take 30.8 percent of Americans' income.

In comparison, it was 33.6 percent in 2000; 30.4 percent in 1990 and 1980; 29.6 percent in 1970; 27.7 percent in 1960; 24.6 percent in 1950; 12 percent in 1920; and 5.9 percent in 1900.

As a reminder, federal and state income tax returns must be mailed on or before Tuesday. Some post offices will have special lines to accept returns until the stroke of midnight on Wednesday to ensure they have the proper postmark.

E-mail: lee@desnews.com