Tax freedom coming soon
Well, a burden is about to be lifted from your shoulders.
According to the Tax Foundation, Tax Freedom Day is coming April 18. That is the day most Americans will have earned enough to pay for all the federal, state and local taxes they owe this year.
A release from the organization – which asserts that it is a nonpartisan, nonprofit research organization – says that Tax Freedom Day is five days later this year than last.
The Tax Foundation cites the fiscal cliff deal that increased federal payroll taxes and the implementation of the Affordable Care Act’s investment and excise taxes as causes of the push back of Tax Freedom Day.
The foundation says citizens will pay 29.4 percent of their income in state and federal taxes. The release says the feds will take $2.76 trillion and states another $1.45 trillion for a total tax bill of $4.22 trillion for Americans.
In Hawaii, we rank 21st in rankings by state – our Tax Freedom Day will be April 14, four days better the national average.
Some other interesting notes in the release:
* In 2000, Americans had their latest ever Tax Freedom Day, on May 1. This equated to 33 percent of total income that year being paid in taxes.
* In 1900, Tax Freedom Day was Jan. 22. Only 5.9 percent of total income was paid in taxes.
* This year, citizens will spend more on taxes than they will on food, housing and clothing combined.
One further item – the official Tax Freedom Day does not include what the federal government will borrow this year to close the deficit (estimated at $833 billion). If that future tax was included and billed to you, Tax Freedom Day would be May 9.
But you don’t have to worry about that – some future generation will pay for that extra bit of spending.
* Editorials reflect the opinion of the publisher.