Each year the Tax Foundation in Washington calculates the number of days that Americans work to pay their federal and state taxes. Their “Tax Freedom Day” is the day on which the average American, if he were required to pay off all of his taxes before collecting any income himself, would finally be able to start working for himself.
This year, the Tax Foundation says that, for the average American, Tax Freedom Day was April 17.
That 107 days makes taxation the biggest expense for the average American — more than food and transportation (31 days), household expenses (65 days), and healthcare and clothing (52 days)… combined.
The latest-ever Tax Freedom Day was May 3, 2000. Four years of federal tax reductions have pushed that record date back about two weeks.
However, the date is now moving forward again, and the Bush administration’s failure to address skyrocketing government spending and borrowing may send it racing ahead in the future.
In 1913, the first tax freedom day arrived on… January 30th.
Worse: today’s true “Tax Freedom Day” may actually arrive *far later* than the Tax Foundation estimates.
“The tax figure used by the Tax Foundation to calculate Tax Freedom Day is somewhat misleading — it underestimates how much you pay to the government,” says Kurt Williamsen in the conservative New American magazine.
“The Tax Foundation derives its figures to estimate Tax Freedom Day from the Bureau of Economic Analysis, and its tax figures don’t take into account many government “fees” and other hidden taxes. For instance, the method used to estimate state and local tax levels doesn’t take into account estate taxes, and it ignores licensing fees (e.g., fees for renewing drivers’ licenses, boat registration fees, fees to get building permits, fees for hunting and fishing licenses, fees added to phone and cable bills, fees on toll roads, etc.); and in estimating national taxes, inflation — a hidden tax caused largely by government debt and overprinting of money — is not part of the figure.”
Furthermore, it doesn’t account for the cost of complying with mandatory but unfunded government regulations, a tremendously expensive tax-in-disguise.
Americans for Tax Reform, a taxpayers’ rights group, tries to calculate that larger figure with its “Cost of Government Day ” — the date on which the average American has earned enough to pay for his or her share of government spending (total federal, state, and local) *plus* the cost of government regulation.
Last year that day fell on — hold on to your checkbook! — July 7. Yes, according to ATF, average citizens had to work 189 days out of the year to meet the costs of government. [A quick bit of math reveals that this is over half the year!]
(Sources:
The Tax Foundation: “Tax Freedom Day” release:
http://www.taxfoundation.org/taxfreedomday.html
Americans for Tax Reform Cost of Gov’t Day 2004:
http://www.atr.org/national/cogd/2004/index.htm
Men’s News Daily article:
http://www.mensnewsdaily.com/archive/m-n/marotta/2005/marotta041205.htm
The New American online:
http://www.thenewamerican.com/artman/publish/printer_1237.shtml)
