Every year the Tax Foundation tells us when to rejoice over our collective freedom from paying for the national debt. If you think it occurs before Tax D-Day, April 15, you are sadly mistaken. In 2008, Tax Freedom began on April 23. As depicted by the chart below, it has not been come on or before the tax filing deadline since 1982.
As reported in the last Tax Freedom Day report:
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).
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.
Interestingly, tax freedom came on January 19 in 1900. Taxes as the percentage of average income was 5.9 percent. The new date has already stated above, but the percent of income going to government was 30.8 percent, down from 31.7 the year before.
States exceeding the average, April 23, are Connecticut (May 8), New Jersey (May 7), New York (May 5), Washington D.C. (May 3), California (April 30), Washington (April 29), Maryland and Massachusetts (April 28), Minnesota (April 27), Florida, Hawaii and Nevada (April 26), Virginia (April 25), Rhode Island and Wisconsin (April 24). Notice, most of these state are liberal leaning. The only state with tax freedom day in March is Alaska. Ohio’s is April 17.
If fat Uncle “Guido” Sam succeeds in stimulating the national debt to over $15 trillion, the day on which the income of American is free of debt by taxation will likely arrive sometime in May of 2010.
The arrival of Tax Freedom Day 2009 is still in question.