Tax Freedom Day


I have just completed my Federal and State taxes and transmitted them to the respective tax offices for this year.  I'm due a refund from the Feds and have to pay the state.  Nothing unexpected popped up which is how I prefer it.

I got curious about how long Americans have to work each year to pay their tax burden, started googling around and came up with some interesting sites.

The Tax Foundation works up a set of figures each year to determine "Tax Freedom Day" .  The day is calculated by taking taxes paid in the current year divided by the nation's income for that year and then projected by Tax Foundation economists using economic and budget projections from various sources, most notably the Congressional Budget Office (CBO).  For those readers who might have a morbid interest in knowing the gruesome details, The Tax Foundation has the exact formula here.

This is not a precise date as the average taxpayer has many variables applying to his or her own taxes.  The Tax Foundation states, "...Tax Freedom Day is the U.S. economy's overall average tax burden -- not the tax burden of the "average" American."  But, the dates are interesting to look at as they change each year, change from state to state, and from country to country.

In 1900, the Tax Freedom Day was calculated to be 22 January (5.9% tax burden).   By 1950, it had moved to 31 March (24.6%) and it increased to 21 April (30.4%) by 1980.  In 2000 it went all the way to 3 May (33.6%).   Last year, 2008, the date had shifted to 23 April (30.8%).  The date is unknown for 2009 until the data is in, which should be around mid March.

By state, the dates shift a little also.  My state of Georgia is calculated as 10 April. 




Five major categories of tax dominate the tax burden. Individual income taxes, both federal and state, require 42 days’ work. Payroll taxes take another 28 days’ work. Sales and excise taxes, mostly state and local, take 16 days to pay off. Corporate income taxes take 13 days, and property taxes take 12.  These are for the year 2008.



According to the Tax Foundation, Americans will work longer each year to pay their taxes than any other purchase.  In 2008, Americans will work 74 days to afford their federal taxes and 39 more days to pay state and local taxes. Meanwhile, buying food requires 35 days of work, clothing 13 days, and housing 60 days. Other major categories are health and medical care (50 days), transportation (29 days), and recreation (21 days).




One last interesting note.

Just for some fun comparisons, here is a look how some other countries fare with their Tax Freedom Day.  Australia's date is 22 April (30.7%),  New Zealand 21 May (39%), United Kingdom 2 June (42%), Canada 14 June (44.8%), Germany 8 July (51,7%), and Sweden coming in last at 29 July at an astounding 57% tax burden.  Israel's Tax Freedom Day would be 15 July with a tax burden of 53.8%.

Again, these figures are not carved in stone for each and every person, they represent the overall average tax burden, not the average tax payers burden.  Just some fun figures to look at while people are writing out their own checks for the government.




I can be E-mailed at outrider@ohnoanotherconservativeblog.com if you have suggestions, questions, or would like to see a particular story written.

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Posted by David Bowman at 2/3/2009 2:14 PM
Categories: uncategorized
 

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