Nation celebrates Tax Freedom Day
<p class="p1">Tuesday, April 17, was the tax filing deadline for the Internal Revenue Service, but today, April 19, is Tax Freedom Day 2018. It’s a significant day for taxpayers and lawmakers because it represents how long Americans as a whole have to work in order to pay the nation’s tax burden.
<p class="p3">A bright note in this year’s Tax Freedom Day is that it is three days earlier than 2017, thanks to the recent federal tax law, the Tax Cuts and Jobs Act, which significantly lowered federal individual and corporate income taxes.
<p class="p3">This day is promoted by the Tax Foundation, which seeks to educate Americans on the impact taxes have on their lives and promotes smarter, pro-growth tax policy.
<p class="p3">Tax Freedom Day takes all federal, state and local taxes and divides them by the nation’s income. In 2018, Americans will pay $3.39 trillion in federal taxes and $1.80 trillion state and local taxes, for a total tax bill of $5.19 trillion, or 30 percent of national income. This year, Tax Freedom Day falls on April 19, 109 days into 2018.
<p class="p3">According to the Tax Foundation, Americans will work the longest to pay federal, state and local income taxes (44 days). Payroll taxes will take 26 days to pay, followed by sales and excise taxes (15 days),corporate income taxes (seven days), and property taxes (11 days). The remaining six days are spent paying estate and inheritance taxes, customs duties, and other taxes.
<p class="p3">Not taken into account is federal borrowing. Since 202, federal expenses have surpassed federal revenues, with the budget deficit exceeding $1 trillion annually from 2009 to 2012.
<p class="p3">If we include this annual federal borrowing, which represents future taxes owed, Tax Freedom Day would occur 17 days later, on May 6. The latest deficit-inclusive Tax Freedom Day occurred during the final year of World War II, on May 25, 1945.
<p class="p3">Residents of Louisiana and Alaska bear the lowest average tax burden in 2018, with Tax Freedom Day having arrived on April 4. However, state Tax Freedom Day in New York is May 14, New Jersey, May 3 and Connecticut, May 3.
<p class="p3">To find more information on how taxes impact our lives, visit the Tax Foundation web site at taxfoundation.org.