Utah has ranked number one in economic competitiveness and economic outlook for the 13th year in a row, according to the American Legislative Exchange Council (ALEC) 2020 “Rich States Poor States” report.
In addition, Utah was also ranked the Best State for Business by 24/7 Wall Street, saying that “the state’s labor market and regulatory climate are particularly business friendly compared to other states.” The study also credited Utah’s tax policy, which is a major factor for companies that are looking to relocate or expand. Massachusetts and Idaho round out the top 3. Idaho, specifically, was ranked high due to its low average income and the amount of younger people expected to enter the workforce in the coming years.
Louisiana ranked lowest on the list, specifically for their shrinking working-age population and a lack of STEM-related employment, which generally reflects a business-friendly environment, according to the study.
Utah has held the #1 spot in the nation for thirteen years in a row, according to the Rich States Poor States report, thanks to the calculated work of state legislators and many other elected officials in promoting and enacting sound tax policy. While other states have bounced around knocking each other out of 2nd to 5th place, it really speaks to Utah’s enviable position to remain #1 for 13 years running.
Utah’s tax and economic policies are unmatched in the nation, with policies like Truth-in-Taxation , which is a shining example for the nation and has saved Utah taxpayers billions in property taxes since your Taxpayers Association got it enacted in 1985. Since its passage, Utah taxpayers have been protected against rampant and runaway property taxes resulting from government overspending while other states continue to crank their property tax burden higher and higher.
Utah has also (mostly) avoided tax pyramiding, or putting taxes on items that are essential in production. The Utah Taxpayers Association has long held that one of the fundamental principles of sound tax policy concerns the avoidance of taxing of business inputs to production. The term “business inputs” refers to purchases that businesses make as a part of their production or operations. Tax policy experts nearly universally agree that sales taxes should be imposed at the final stage of consumption only, and not during the various stages of production or development.
Utah has also taken positive steps in regards to the income tax. Back in 2007, Utah’s income tax was lowered from 7% to a flat 5%. In 2018, it was dropped to 4.95%. Utah’s corporate income tax structure also incentivizes businesses to relocate to the state by not punishing employers that bring their payroll and capital to the Beehive State. Several states punish businesses through the calculation of corporate profits, using a formula that includes sales, payroll, and capital. Utah, for the most part, only uses the sales component in that calculation. This provides a very low income tax for businesses which sell most of their products out of state.
The Utah Taxpayers Association has been advocating in favor of strong tax and economic principles for decades, and Utah is reaping the rewards. Thanks to these efforts, Utah has a strong business environment that benefits all Utahns and their families, through strong job growth and increased economic activity.
Utah’s legislatures and other policymakers have worked diligently to keep our #1 ranking in economic outlook and competitiveness. The Utah Taxpayers Association urges legislators and other elected officials to respect the good work that has been done and to not take action, such as hiking tax rates or enacting tax pyramiding, that would reverse our course.
Getting it wrong would ruin the economic landscape Utah has built from which it would take decades to recover.