Nat’l Tax Freedom Day still days away
Tax Day — normally the 15th day of April — was extended until today due to the calendar and a holiday.
Tax Freedom Day, however, is another story. That’s the day when, in theory, the nation as a whole has earned enough income to pay its collective taxes.
The Tax Foundation adds up all federal taxes — not just income taxes, the returns for which are due today — plus state and local taxes in calculating Tax Freedom Day, divides that by the total personal income earned by Americans then factors in the days in a year.
This year, it’s April 24, although it can be earlier or later for an individual, depending on where he or she lives. But most folks must work through January to pay off federal income taxes. February’s checks provide payroll taxes such as Social Security and Medicare, plus state income taxes.
March’s labors pay state and local sales and excise taxes, and property taxes. Those first 24 days spent working in April meet higher prices due to corporate income taxes, plus motor vehicle, severance and estate taxes.
Note this only provides federal revenues, not spending. If we paid enough taxes to cover the budget deficit, Tax Freedom Day would be May 8.
That’s two weeks to foot the deficit for one year.
You might be wondering how long Americans would have to work to pay off the national debt, now nearly $20 trillion. We may need to file for an extension.