Analysis by the Tax Foundation (TF) has confirmed that, this year, Americans will have to work three days on average longer than in 2013 – from January 1 to April 21 (111 days) – before earning enough to pay off their United States tax obligations at the federal, state, and local levels.
The TF has also calculated that, if the federal Government raised taxes enough to close the budget deficit, the so-called “Tax Freedom Day” would come on May 6, instead of April 21. The total tax bill at all levels is said to come to approximately USD4.5 trillion, or 30.2 percent of Americans’ total income.
Tax Freedom Day is three days later than last year due mainly “to the country’s continued slow economic recovery, which is expected to boost tax revenue especially from the corporate, payroll, and individual income tax,” the TF said.
It pointed out also that: “The total tax burden borne by residents of different states varies considerably due to differing state tax policies, and because of the progressivity of the federal tax system.”
Higher income-earners and higher taxed states will mark ‘Tax Freedom Day’ later. Residents of Connecticut (on May 9), New Jersey (May 9), and New York (May 4) face a significantly higher tax burden than those in lower-income states. Residents of Louisiana bear the lowest average tax burden in 2014, with Tax Freedom Day having already arrived for them on March 30, next followed by Mississippi (April 2) and South Dakota (April 4).
Historically, the date for Tax Freedom Day has fluctuated significantly. It is said that the latest-ever nationwide Tax Freedom Day was May 1, 2000, due to an average tax burden of 33 percent. A century earlier, in 1900, Americans paid only 5.9 percent of their income in taxes with Tax Freedom Day falling on January 22.
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- 8 Apr, 2016
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