INCOME GROWTH SLOWS
Total income and most sources of income experienced slower growth in 1999 than in 1998; dividend growth was higher (Table 1), as well as partnership income. This income slowing was in the face of an increase in returns of 2.5% compared to 2.2% in 1998. Capital gains continued to show a very good growth at 15.3%, but even that was down from an astounding growth in 1997 and 1998. The stories in these two years are of course partially related to exceptional recent market development and tax changes. Capital gains have been the most rapidly growing source of income this decade, and are now the second largest source, excluding other which is a statistical catch-all.
Wages, which are still by far the largest source of income, grew by 80 basis points less than last year, at 6.5 percent. It should be noted that although that is a slower rate it is still quite respectable, but it is well below the average so far this decade.
Partnership income growth, which has been the second fastest growing for the decade, while way below the decade average was above the poor showing in 1998. Sole Proprietors income growth was negative. Dividends were the second most quickly growing source of income, while interest earnings were stagnant.
Table 2 gives a recent history of itemized deductions: the top panel is the raw data, the middle panel shows how each sub category relates to total itemized deductions, and the bottom panel shows the relation to AGI for those who itemize. The right column in each section shows the ratio of the 1999 column to the 1990 column for the panel in question, and is useful for analyzing changing patterns over the decade so far. For each of the years displayed, and probably for the interim years, interest is the largest itemized deduction. In each year, taxes nose out contributions for the second spot.
Itemized deductions, both the total and the limited total, have increased slightly relative to adjusted gross income the last several years, but fell slightly in 1999. The limitation of itemized deductions on upper income tax payers seems to be biting a bit less than in 1998 but more than in previous years: the ratio to total deductions increasing to 94.1% from 92.8% in 1998.
From the page on credits in the body of the report, the reader will find that the relatively new child credit was worth $209.9 million to Utah taxpayers while the education tax credit was valued at $50.2 million.