Happy Tax Freedom Day
by Apr 9th 2010 1:00PM
The idea of Tax Freedom Day was conceived in 1948 by Florida businessman Dallas Hostetler. Hostetler eventually transferred the trademarked day to the Tax Foundation, which has calculated Tax Freedom Day for various nations and the states ever since.
To arrive at the calculation, every tax dollar in the US received as income is counted. This includes dollars other than the personal income tax, even though the personal income tax is the largest single contributor to the revenues. Personal income taxes, including federal, state and local taxes, are a whopping one-third of the calculation, requiring 32 days' work to pay off. Payroll taxes take another 25 days' work; sales and excise taxes take 15 days to pay off; corporate income taxes take 8 days; and property taxes take 12. It will take an additional 6 days to pay other taxes, including motor vehicle license taxes and severance taxes, and about half a day to pay off estate taxes.
This year's Tax Freedom Day arrived one day later than last year, but more than two weeks earlier than in 2007. It's still better than the year 2000, when Tax Freedom Day didn't roll around until May 1. Tax cuts over the past decade have helped roll back the date ever since -- we're paying fewer taxes these days than before.
Of course, don't get too excited: Tax Freedom Day does not count the deficit. If we were required to factor that in, too, we'd be working more than another month. An additional 38 days would be required to pay off our taxes and
obligations if we added in the federal deficit.
I'm celebrating by going to work. You?