Tax Freedom Day Arrives Later This Year
"Tax Freedom Day" will be arriving later again this year, which means more work spent to get your tax burden paid.
According to the Tax Foundation Organization:
Tax Freedom Day, the day when the nation as a whole has earned enough money to pay its federal, state, and local tax bill for year, will arrive 114 days into the year on April 24, according to the annual report released this morning by the nonpartisan tax foundation.
“Tax Freedom Day gives us a vivid representation of how much we pay for the goods and services provided by governments at all levels,” said Tax Foundation Economist Kyle Pomerleau. “Arguments can be made that the tax bill is too high or too low, but in order to have an honest discussion, it’s important for taxpayers to understand cost of government. Tax Freedom Day helps people relate to that cost.”
While the national date arrives nine days after the tax filing deadline, each state’s total federal, state, and local tax burden varies greatly. Tax Freedom Day arrives earliest in Louisiana on April 2 and Mississippi on April 4. On May 13, Connecticut and New Jersey will be the last states to reach Tax Freedom Day this year.
Key takeaways from the report:
- Tax Freedom Day is one day later than last year due mainly to the country’s continued steady economic growth, which is expected to boost tax revenue especially from the corporate, payroll, and individual income tax.
- Americans will collectively spend more on taxes in 2015 than they will on food, clothing, and housing combined.
- Americans will pay $3.3 trillion in federal taxes and $1.5 trillion in state and local taxes, for a total bill of more than $4.8 trillion, or 31.1 percent of the nation’s income.
- If you include annual federal borrowing, which represents future taxes owed, Tax Freedom Day would occur 14 days later on May 8.
- Tax Freedom Day is a significant date for taxpayers and lawmakers because it represents how long Americans as a whole have to work in order to pay the nation’s tax burden.
Historically, the date for Tax Freedom Day has fluctuated significantly. The latest-ever Tax Freedom Day was May 1, 2000 – meaning that Americans paid 33 percent of their collective incomes towards taxes. A century earlier, in 1900, only 5.9 percent of national income was required to pay the tax bill, and Tax Freedom Day fell January 22.