“Tax Freedom Day” is the day when, according to the non-partisan Tax Foundation, the nation as a whole has earned enough money to pay its total tax bill for the year.
To calculate this date, Tax Freedom Day takes all federal, state, and local taxes and divides them by the nation’s income.
For 2015 the Tax Foundation calculates Americans will pay a whopping $3.28 trillion in federal taxes and $1.57 trillion in state and local taxes — for a total tax bill of $4.85 trillion, or a staggering 31 percent of total national income.
So this year, Tax Freedom Day falls on April 24 — 114 days into the year.
And… if you include annual federal borrowing, which represents future taxes owed, Tax Freedom Day doesn’t arrive for another 14 days, until May 8.
Until then, the average American is, essentially, slaving away fulltime for the government.
To put these taxes in perspective, Americans will collectively spend more on taxes in 2015 than they will on the basic necessities of life — food, clothing, and housing — combined.
By contrast, in 1900, in pre-income tax America, Americans paid only 5.9 percent of their income in taxes, meaning Tax Freedom Day came on… January 22.
This year’s Tax Freedom Day is one of the latest ever. It’s a day later than last year, and is the latest since 2007, when it fell on April 25. The latest-ever Tax Freedom Day was May 1, 2000.
Awful as all this is, some critics argue that the Tax Foundation greatly underestimates the cost of government.
Americans for Tax Reform (ATR), a group that lobbies for lower taxes and smaller government, each year calculates its “Cost of Government Day.” Cost of Government Day is the date on which the average American has earned enough to pay taxes — PLUS the cost of mandatory but unfunded federal, state and local regulations.
Last year ATR’s Cost of Government Day didn’t arrive until July 6 — meaning that government consumed 51% of national income, and the average American labored more than half the year — 186 days — to pay what the state demanded.
Further, writing in the conservative New American magazine, Bob Adelmann argues that the Tax Foundation doesn’t take into account many government costs and hidden taxes, including estate taxes and fees (such as drivers’ licenses, boat registration, building permits, hunting and fishing licenses, phone and cable bills, etc.); that it ignores the staggering cost of complying with the tax laws; and that it also ignores the devastating “hidden tax” of inflation.
Combining all the above — fees, compliance costs, regulations, hidden taxes, etc. — adds up to a government that is devouring far more than half of our incomes.
Which brings to mind the old joke: “Taxes are revolting. Why aren’t you?”