| |  Think you’re done working for “the man.” Oh no, my friend. You’ve got at least another week or two, depending on where you live. Tax Freedom Day this year is April 18 nationwide. That’s the day when the average American |
| | has earned enough since Jan. 1 to pay “the tax man” for all the state and local taxes he or she is obligated to pay the entire year. That is, assuming you had put every penny of your income toward nothing else than your tax bill from the start of the year. What’s worse is that this year freedom day comes five days later than last year. Why is this? Well, the Tax Foundation, the Washington-based tax research group that calculates Freedom Day puts it this way: “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. Additionally, the Affordable Care Act’s investment tax and excise tax went into effect.” Ah yes, Obamacare is starting to kick in. And, as every working American already knows, taxes have gone up since New Year’s Day. There is some good news. The economy is continuing to grow, which will over time “boost profits, incomes and tax revenues.” I recommend going to the Tax Freedom Day web site, which you can do by clicking this text. Once there, you can find a state-by-state list of freedom days. Each state’s is different, just as each state and local government has different tax rates. In Utah, where this blog originates, Freedom Day is April 13, the 26th latest in the union. Connecticut is No. 1 at May 13. Mississippi and Louisiana residents tie for the earliest freedom at March 29. Those folks already are free. Also of interest, the Tax Foundation has a separate calculation for Freedom Day if Americans had to retire the budget deficit, which represents taxes owed in the future. That date is May 9. So what is the significance of all these dates? It’s all in the historical perspective. The web site provides a spreadsheet showing Tax Freedom Day going back to 1900. If you look only at the last 50 years or so, you would think the nation is doing pretty good. In 1963, Freedom Day was April 13. It’s been as late as May 1, which was in 2000. Fair enough, but go back 100 years and you’ll discover Freedom Day on Jan. 19. That year, 1913, was the year the Constitution was amended to allow an income tax. The lesson here has to do with conditioning. World wars pushed the date farther into the year, but when the soldiers retreated, Tax Freedom Day did not. Americans became conditioned. A Gallup poll conducted last year found 47 percent of Americans believing their tax burden to be about right, and 3 percent saying it was too low. Only 46 percent said it was too high. (Read the poll by clicking this text.) I wonder what a similar poll would have shown in 1913 if people suddenly had to pay as much as they do today. I wonder what they would have thought if they knew that even what we pay today ($2.76 trillion in federal taxes) comes nearly $1 trillion short of covering Washington’s expenses. No, we’re not paying enough to cover what our government is spending. But we’re paying 29.4 percent of what we earn on all government taxes. Does that sound about right to you? |
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