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home : news : national news free May 26, 2016

   
4/3/2013 1:11:00 PM
Tax freedom day comes 5 days later than last year
Americans will work over three and a half months before they have earned enough money to pay this year's tax obligations

Washington, D.C. — Tax Freedom Day will arrive on April 18th this year, the 108th day of 2013, according to the Tax Foundation’s annual calculation.

What is Tax
Freedom Day?
Tax Freedom Day is the day when the nation as a whole has earned enough money to pay its total tax bill for the year. A vivid, calendar based illustration of the cost of government, Tax Freedom Day divides all federal, state, and local taxes by the nation’s income. In 2013, Americans will pay $2.76 trillion in federal taxes and $1.45 trillion in state taxes, for a total tax bill of $4.22 trillion, or 29.4 percent of income. April 18 is 29.4 percent, or 108 days, into the year.

Why is Tax Freedom Day later this year?
Tax Freedom Day is five days later than last year, due mainly to the fiscal cliff deal that raised federal taxes on individual income and payroll.
Both higher federal taxes and rebounding incomes also contribute to this year’s later date.
Additionally, the Affordable Care Act’s investment tax and excise tax went into effect. Finally, despite these tax increases, the economy is expected to continue its slow recovery, boosting profits, incomes, and tax revenues.
Historically, the date for Tax Freedom Day has fluctuated significantly. The latest-ever nationwide Tax Freedom Day was May 1, 2000 – meaning that Americans paid one-third of their total income in taxes. A century earlier, in 1900, Americans paid only 5.9% of their income in taxes, meaning Tax Freedom Day came on January 22.

When is Tax Freedom Day if you include federal
borrowing?
Since 2002, federal expenses have exceeded federal revenues, with the budget deficit exceeding $1 trillion annually from 2009 to 2012. In 2013, the deficit will come down slightly to $833 billion. If we include this annual federal borrowing, which represents future taxes owed, Tax Freedom Day would occur on May 9, 21 days later. The latest ever deficit-inclusive Tax Freedom Day occurred during World War II, on May 21, 1945.

When is my state's Tax Freedom Day?
The total tax burden borne by residents of different states varies considerably, due to differing state tax policies and because of the steep progressivity of the federal tax system. This means higher income states celebrate Tax Freedom Day later.
This means higher-income states celebrate Tax Freedom Day later: residents of Connecticut (May 13th), New York (May 6th), and New Jersey (May 4th) face a significantly higher federal tax burden than lower-income states.. Residents of Mississippi and Louisiana will bear the lowest tax burdens in 2013, with Tax Freedom Day having arrived for them on March 29th.
Tax Freedom Day arrives on April 26th in Illinois, which is ranked the at the 25th spot.

Who calculates Tax Freedom Day?
Tax Foundation economists calculate Tax Freedom Day using federal budget projections, data from the U.S. Census and the Bureau of Economic Analysis, and projections of state and local taxes. Tax Freedom Day was conceived in 1948 by Florida businessman Dallas Hostetler, who deeded the concept to the Tax Foundation when he retired in 1971. Tax Freedom Day by state has been calculated since 1990, when sufficient data became available.
The Tax Foundation is a nonpartisan research organization that has monitored fiscal policy at the federal, state and local levels since 1937.
Tax facts
Americans will spend more in taxes in 2013 than they will on food, clothing, and housing combined.
Individual income taxes represent the largest component of Americans’ tax bills. All but seven states levy a state income tax on top of the federal income tax. Paying these taxes together takes Americans about 40 days of work.
Americans will work 9 days to pay their share of corporate income taxes. This figure peaked, along with corporate profits, in 2006 at 14 days, and dropped in half by 2009 to 7 days. All taxes on businesses are ultimately passed on to individuals in the form of higher prices, lower wages or employment levels, or lower share value.
Americans will work 25 days to pay their payroll, or social insurance, taxes —those taxes dedicated to funding social insurance programs such as Social Security and Medicare.
Americans will spend 14 days working to pay sales and excise taxes, 12 days to pay property taxes, and 7 days for other miscellaneous taxes (such as car taxes, severance taxes, and estate taxes).

Online:
www.TaxFoundation.org/taxfreedomday.


Anderson Jewelers




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