This year Americans will spend 114 days working to pay their taxes, including federal, state, and local income taxes, payroll taxes like Social Security, sales tax, and property tax.
“The power to tax is the power to destroy.”
When I got my first job and had to deal with the sting of income taxes, my physician-dad offered up this bit of wisdom: “taxes are the price of success.” Well, success is coming later and later.
Tax Freedom Day, that theoretical day when you stop making money to pay taxes and start earning money for yourself, is rather late in 2015. It arrives on April 24 this year (one day later than last year). This means that Americans will spend 114 days working to pay their taxes, including federal, state, and local income taxes, payroll taxes like Social Security, sales tax, and property tax.
“Americans will pay $3.3 trillion in federal taxes and $1.5 trillion in state and local taxes, for a total bill of more than $4.8 trillion, or 31% of the nation’s income,” according to The Tax Foundation, the nation’s leading independent tax policy research organization. In fact, Americans will collectively spend more on taxes than they will on food, clothing, and housing combined.
Because taxes vary from state to state, some Americans will work longer than others to get out from under their tax burden. Higher-income and higher-tax states like Connecticut and New Jersey will toil the longest, until May 13, before they start working for themselves. New Yorkers will work until May 8 before they reach Tax Freedom Day, followed by California (May 3) and Massachusetts (May 2).
Because of modest incomes and low state and local tax burdens, Louisiana (April 2), Mississippi (April 4), South Dakota (April 8), Tennessee (April 9), and Alabama (April 9) celebrate Tax Freedom Day much earlier.
This year, Americans will work the longest to pay federal, state, and local individual income taxes (43 days). Payroll taxes will take 26 days to pay, followed by sales and excise taxes (15 days), corporate income taxes (12 days), and property taxes (11 days). The remaining 7 days are spent paying estate and inheritance taxes, customs duties, and other taxes.
“Tax Freedom Day gives us a vivid representation of how much we pay for the goods and services provided by governments at all levels,” explains Kyle Pomerleau, MPP, a Tax Foundation economist. “Arguments can be made that the tax bill is too high or too low, but in order to have an honest discussion, it’s important for taxpayers to understand cost of government. Tax Freedom Day helps people relate to that cost.”
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And 5 more quotes about taxes …
• “The hardest thing to understand in the world is the income tax.”
• “The taxpayer—that’s someone who works for the federal government but doesn’t have to take a civil service examination.”
• “The difference between death and taxes is death doesn't get worse every time Congress meets.”
• “The income tax has created more criminals than any other single act of government.”
• “It’s tax time. I know this because I’m staring at documents that make no sense to me, no matter how many beers I drink.”