For 2012, Tax Day Is Also Tax Freedom Day
by Tax Rascal
Categories: Featured, Politics, Tax News, Tax Policy
According to the Tax Foundation, the day you have to pay your taxes is also the day you pay off your taxes
This year, in a fitting twist of fate, Tax Day and Tax Freedom Day both arrive on April 17. What is Tax Freedom Day? Don’t worry, it doesn’t involve crazies in tricorn hats carrying posters of President Obama with a Hitler mustache (though trust me, April 17 will see its share of crazy protesters). No, Tax Freedom Day is designated annually by the Tax Foundation as the day that Americans have earned enough income to pay off their tax burden.
Americans will have to work 107 days to pay off the 29.2% of their income that they owe to federal, state, and local taxes. If you’re curious that’s
- 32 days for individual federal income taxes
- 8 days for individual state and local income taxes
- 23 days for federal social insurance taxes
- 4 hours for state and local social insurance taxes
- 2 days for federal sales and excise taxes
- 12 days for state and local sales and excise taxes
- 12 days for state and local property taxes
- 9 days for federal corporate income taxes
- 1 day for state and local corporate income taxes
- 3 days for other federal taxes
- 4 days for other state and local taxes
And that’s only to pay for what the government is taxing, not what it’s spending. If it were to close the budget deficit with an additional $1.014 trillion, Americans would have to work until May 14 to pay it all off!
This year Tax Freedom Day has crept a little later in the year, compared to April 12 last year. In 2000 the latest-ever Tax Freedom Day fell on May 1, but on the plus side the government did enjoy a budget surplus. A century earlier, before the existence of the welfare state and before America had shouldered the burden of international responsibility, Tax Freedom Day fell on January 22.
Of course, Tax Freedom Day varies by state. Red states tend to enjoy an earlier Tax Freedom Day – Tennessee as early as March 31 – and those of us deep in the blue have work a couple more weeks. The latest in the nation is the tri-state trifecta, with New York and New Jersey clocking in at May 1 and Connecticut on May 5.
Though an interesting visualization Tax Freedom Day is something of a gimmick, an easy way to incite a mildly libertarian sigh of outrage. As Joseph Heath writes in his book Filthy Lucre
It would make just as much sense to declare an annual “freedom day,” in order to let mortgage owners know what day they “stop working for the bank and start working for themselves”…But who cares? Homeowners are not really “working for the bank”; they’re merely financing their own consumption. After all, they’re the ones living in the house, not the bank manager.
But with all this talk about Tax Freedom Day, don’t forget about the actual Tax Day. File to get your fast refund today (literally) before your taxes become late.