-For each of the past 12 years, Stephen Moore and his colleagues at the American Legislative Exchange Council have created an Economic Outlook ranking of the 50 states titled “Rich States, Poor States.” Their 2019 findings were recently released and Utah ranked number one. In an Op-Ed Moore wrote this month for the Wall Street Journal, he broke the ranking down to back up his headline: “Why Utah Has Become America’s Economic Superstar.”
The ranking and praise came as no surprise; Utah has topped the list in each of the 12 years that it has been compiled and released. Our flat-rate income tax, business savvy taxing and regulation, and low state tax burden make Utah an inviting place to do business. Another major factor in our economic success that may seem less obvious but have more personal effects– Utah has no state Estate Tax.
Why Does Utah Estate Tax Affect Economic Outlook?
The lack of a state-imposed “Death Tax” is far-reaching. Confronted with the prospect of leaving a heavily taxed estate, successful entrepreneurs often choose to stop growing their business portfolios and retire at an earlier age. Utah’s lack of a state tax burden on inheritable wealth keeps the brightest minds in our local economy engaged and building their businesses later into their lives. And when they do retire, low taxes keep high net-worth individuals and their assets local. Rather than retiring to Florida and an advantageous tax scenario, successful Utahns stay put and enjoy the mountains and red rocks of our home state as well as a low tax burden.
Beyond the first generation, those who stand to inherit from an estate are also statistically more likely to form new businesses. The Tax Policy Center suggests that the actual amount of the inheritance is less relevant to that entrepreneurial outcome than the existence of the inheritance at all. By creating an environment where businesses thrive and their owners’ profit, accumulate wealth, and hand that wealth down to their children, Utah is feeding the entrepreneurial and innovative population that continues that cycle of success.
Fillmore Spencer is Your Utah Estate Planning Partner
As your estate planning partners, we love working in a state that prioritizes business growth, innovation, and accumulation of wealth. Beyond Utah, our understanding of local and federal tax laws allows us to guide you in building your legacy, not just distributing the assets that remain after your death. Business structure and succession planning, tax deferral and wealth structuring are all areas where we can help you avoid legal snares that might cost your estate money and land your heirs in probate. We can help you build on the foundation that Utah’s legislation has provided to keep more of what you have earned for your heirs or give it to the organizations you choose to support rather than the federal government.
Richard W. Sheffield counsels clients on a broad range of business, real estate, estate planning, finance and transaction matters. He returned to Utah from Phoenix, Arizona, after 20 years of experience at one of the largest law firms in the West. He has extensive experience and know-how in general and specialized issues faced by new and established businesses.
A founding partner of the firm, Richard seeks to build confidence and trust with his clients and help them realize their objectives and purposes. He has served in various capacities in the community, including roles with the Boards of the Provo School District, the BYU Alumni Association, The Arizona Forum, the Timpanogos Legal Center, and the J. Reuben Clark Law Society.