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Breakout the Cake! It's Tax Freedom Day 2017!

| April 24, 2017
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You have never heard of Tax Freedom Day?  It is the day when the nation as a whole has earned enough money to pay its tax bill for the entire year.  So all the work you have already put in for 2017 has been required just to pay your taxes; income, payroll, sales and excise, corporate income, property, estate and inheritance and other taxes.   If you factor in US federal borrowing, which is required to pay for the deficit and represents future taxes owed, Tax Freedom Day is delayed until May 10th.

Collectively, Americans will spend more on taxes in 2016 than on food, clothing and housing combined.  In total we will pay $3.3 Trillion in federal taxes, $1.6 trillion in state and local taxes.  This equates to 31% of our income.

Now if the concept of a federal Tax Freedom Day is depressing, it might be even worse for you than others.  To calculate the national Tax Freedom Day all state taxes are averaged together.  However, if you live in a state with a higher than average tax burden your Tax Freedom Day is even later.  For example, if you live in Connecticut (May 21), New Jersey (May 12) or New York (May 11) the federal Tax Freedom Day is just a rest area on your journey to more taxes.  

As late as the April 24th Tax Freedom Day may feel, it has been worse.  Back in 2000, Americans paid an average of 33% of their income in taxes and Tax Freedom Day didn't arrive until May 1st.  But my how things have changed--in 1900 Americans paid only 5.9% of their income in taxes.  Tax Freedom Day that year fell on January 22nd.

So don't miss your chance to celebrate.  Now that your taxes are paid, the rest of the year you get to work for yourself!

Source:  www,taxfoundation.org

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