Tax Freedom Day

Thanks to Mike Proto for providing this link for a website re Tax Freedom Day – the date originally calculated in 1948 by a Florida businessman that vividly shows the cost of government by determining the date the nation as a whole has earned enough money to pay its tax bill for the year.  The earlier the Tax Freedom Day the better – in 2013 it increased five days to April 18 – the 108th day of the year meaning that the average American draws the first dollar he could use for himself on April 19.

 

The website explains that the first step in determining Tax Freedom Day is to divide all federal, state, and local taxes by the national income.  In 2013, federal tax receipts are expected to be $2.76 trillion & state & local tax receipts are expected to be $1.45 trillion, for total tax revenue of $4.21 trillion, or 29.4 percent of national income.  The period from January 1 to April 18 is 29.4 percent of the calendar year.

 

You can click on the above website & find virtually any information you can think of including each state's ranking, an analysis that adds borrowing costs known as the deficit-inclusive Tax Freedom Day (May 9 in 2013 – just 12 days short of the record), & facts like Americans spend more on taxes than they do on food, clothing, & housing combined & in 1900 state & local taxes made up the great majority of the total tax burden & Tax Freedom Day was January 22.

 

With re to the state rankings I will save my northeast neighbors some time – #1 CT (May 13), #2 NY (May 6), #3 NJ (May 4), #4 tied MA & IL (April 25).

 

Now all of this information can be of value to you.  It sure was to economist Arthur Laffer when about three years ago he implemented part of his exit plan & moved from # 6 CA to # 48 TN.

 

As you peruse the website & look @ all of the taxes listed I'll bet many of you will wonder more than ever why we put up with this & why the FairTax has not been enacted. 

 

Under the FairTax the true costs of running government will become visible for the first time as everyone sees what portion of their spending goes to finance federal government spending.  People may start to take a closer look & when they do the earmarks & pork barrel spending that politicians thrive on to get reelected will disappear. Not only will the FairTax put tax attorneys & tax lobbyists out of business – it will also put career politicians out of business in effect creating term limits because the great powerful jobs will no longer be in Washington.

 

The biggest benefit to me of Americans becoming more aware of the size of their tax payments is that they will insist on the spending cuts necessary to lower the government's claims on their earned income so that the FairTax rate will be lowered, along with state & local tax rates, until ultimately Tax Freedom Day becomes 12:01 AM on January 1 of each year.