July 6

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Tax Freedom Day is Nearly Here — Or Is It?

in Liberator Online by James W. Harris Comments are off

(From the Activist Ammunition section in Volume 20, No. 13 of the Liberator Online. Subscribe here!)

Tax Freedom Day“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?”

Cost of Government Day: July 6

in Economic Liberty, Liberator Online, Taxes by James W. Harris Comments are off

(From the Intellectual Ammunition section in Volume 19, No. 10 of the Liberator Online. Subscribe here!)

While Americans celebrated Independence Day on July 4, we are far from being able to celebrate fiscal independence.

Indeed, according to Americans for Tax Reform (ATR), this year Cost of Government Day fell on… July 6. Ouch!

Cost of Government Day — calculated each year by ATR — marks the point during the year when the average American has finally earned enough income to pay for his or her share of the spending and regulatory burdens imposed by government at the federal, state and local levels.

2014 is the sixth consecutive year that Cost of Government Day arrived in July; prior to President Obama taking office, Cost of Government Day had never fallen after June 27.

All told, the full costs of government amount to a staggering 51 percent of GDP. Workers toil 121 days to pay for government spending alone, and 65 days to pay for regulatory costs. Americans labor in tax slavery 186 days — more than half the year — to pay off the full burden of government.

Some states like Connecticut and New Jersey must work even longer than that to pay for the costs of high spending and taxes in their states. The latest state Cost of Government Day once again occurs in Connecticut, falling on July 26 for 2014. The earliest Cost of Government Day goes to Louisiana, occurring on June 12 this year.

The days worked to pay for federal spending decreased since last year. However, federal regulatory costs have increased since 2013. While Americans worked 65 days to pay for the costs imposed by regulation in 2014, if the regulatory regime grows larger it will almost certainly mean much later Cost of Government Days in the future.