CNSNews.com – Tax Freedom Day, the day on which Americans will have made enough money to fully fund government, will arrive eight days earlier than last year, due to both the effects of the recession and the economic stimulus spending bill passed by Congress.
That means that Americans get to keep an extra week’s worth of their earnings this year.
Calculated by the Tax Foundation, a nonpartisan tax research group, Tax Freedom Day will arrive on April 13 – meaning that it would require every dollar in wages Americans make between Jan. 1 and April 13 to pay all taxes and fully fund federal, state, and local government.
In 2008, Tax Freedom Day fell on April 21, meaning that Americans had to give 111 days worth of their income to support the government that year. This year, however, taxpayers will only have to work for 103 days.
The longest amount of time taken to fund government was 123 days in 2000, when Americans paid the highest-ever share of income in taxes – 33.6 percent – and Tax Freedom Day fell on May 3. Currently, 28.2 percent of the nation’s earnings are paid in taxes.
Of the 103 days Americans will work to fund government, 38 days will be spent paying income taxes, 27 days paying Social Security taxes, 15 days paying sales taxes, 12 paying property taxes, six paying corporate income taxes and four days paying other taxes such as tariffs and estate taxes.
Relief comes a bit earlier this year thanks to the twin effects of recession and the tax cuts contained in the economic stimulus bill, both of which contributed to a drop in tax revenues.
Higher unemployment, furloughs, and reductions in salaries and hours mean the government will collect less in taxes in 2009. Also, the economic stimulus bill passed in February contained many tax cuts and credits that will further reduce revenue in 2009.
That drop in revenues, however, does not mean a reduction in government spending. According to data published by Tax Foundation, government spending in 2009 will grow to mythic levels, meaning that were government to run a balanced budget, Americans would have to work until May 29 to fully pay off all of the Obama administration’s spending proposals.
May 29 is the latest date ever calculated for paying off the entire federal budget, eclipsing the previous record of May 2, 1992 by 27 days. This means that if every penny of the nation’s income was confiscated by both state and federal government, it would take until May 29 of this year before the government was fully funded and Americans could keep their pay.
The nation’s tax burden is calculated by adding local, state, and federal taxes together, giving each state a different Tax Freedom Day, depending on how heavily each state taxes its citizens and by how heavily they are taxed by the federal government.
Alaskans will pay off their share of government the fastest, freeing themselves from taxation by March 23, while Connecticut will take the longest – working until April 30 to fully pay for their share of government.
Connecticut’s high per-capita income means it pays extraordinarily high federal income taxes, according to the Tax Foundation, outstripping notoriously high-tax states like New Jersey, New York, and California.
Josh Barro, the Tax Foundation economist who authored the Tax Freedom Day report, said that the point of the report was to show people just what it takes to pay for their government, not to cast judgment on government spending.
“The government certainly provides a lot of services that people like and appreciate,” Barro told CNSNews.com. “It’s not our contention that government shouldn’t collect taxes and shouldn’t spend money.
“What Tax Freedom Day does is it makes clear to people what the cost of those government services is and how much of their income is going toward paying for them.”
via CNSNews.com – Government Will Cost Americans 103 Days Pay in 2009 .