>FYI – Tax Freedom Day Arrived on April 12

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FYI – Tax Freedom Day arrived for many, if not all of us on April 12th. Tax Freedom Day is the day of the years when it is figured that the average American worker has earned enough money to pay their federal, state and local property tax obligations for the year.

It does not celebrate whether or not the average american worker can afford those taxes however!

by Kail Padgitt –Tax Foundation

Tax Foundation Special Report No. 190

Tax Freedom Day® will arrive on April 12 this year, the 102nd day of 2011. That means Americans will work well over three months of the year, from January 1 to April 12, before they have earned enough money to pay this year’s tax obligations at the federal, state and local levels.

Tax Freedom Day arrives three day later in 2011 than it did in 2010, but nearly two weeks earlier than in 2007. This shift toward a lower tax burden since 2007 has been driven by three factors:

• The Great Recession has reduced tax collec tions even faster than it has reduced income.

• President Obama and the Congress, after a long debate, extended the Bush-era tax cuts for two additional years.

• As part of the extension agreement, the Making Work Pay tax credit was replaced with the 2 percent reduction in the payroll tax.

Despite these tax reductions, Americans will pay more in taxes in 2011 than they will spend on groceries, clothing and shelter combined.

Tax Freedom Day 2011 is later than last year largely because of income changes rather than statutory tax law changes. As the economic recovery continues, individuals’ rising income pushes them into higher tax brackets. Corporate tax revenue has also seen a resurgence.

Although these income increases are the main reason for the later Tax Freedom Day, several tax law changes are also partly to blame: The federal estate tax has returned after a one-year repeal, this time at a rate of 35 percent and with an exemption of $5 million. In addition, taxes associated with the Patient Protection and the Affordable Care Act con tinue to be phased in.

Tax Freedom Day, like almost all tax burden measures, does not take into account the current year’s federal budget deficit. Only taxes that will actually be collected dur ing 2011 count in the tally. In many years the deficit is fairly small as a percentage of total government spending, so Tax Freedom Day alone is a good guide to the size of government.

Since 2008, however, deficits have increased dramatically. As a result, Tax Freedom Day may give the impression that the burden of government is smaller than it is. If the federal government were planning to col lect enough in taxes during 2011 to finance all of its spending, it would have to collect about $1.48 trillion more, and Tax Freedom Day would arrive on May 23 instead of April 12—adding an additional 41 days to the nation’s work for government. This date for a deficit-inclusive measure is the latest since World War II.

Click >>> Here to read the full report.

3 Comments

Filed under blog, blogging, corporate tax breaks, federal budget deficit, President Obama, Tax Foundation, Tax Freedom Day, tax obligation

3 responses to “>FYI – Tax Freedom Day Arrived on April 12

  1. >Maybe we will have to add a couple of extra days if the republicans are elected again in Middletown Township!God save us from their BS !!!Murray already has her foot in her mouth !!Fiore isn't called "fibber" for nothing !

  2. >In NJ, we pay until April 29…………From page 7 of the report,"At the other end of the tax burden spectrumare states with comparatively late TaxFreedom Days. The residents of Connecticutwill celebrate last, as usual, working until the122nd day of the year, from January 1 to May 2, before earning enough to pay all their taxes.Because Connecticut’s income per capita ishigher than in any other state, its residentspay extraordinarily high federal income taxes.Nearby states New Jersey (April 29) and NewYork (April 24) are second and third, respectively.Maryland (April 17) and Washington(April 16) round out the top five.Tax

  3. >Anon 12:00Thanks for the info. I hadn't had time to read the report myself.

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