The BizFilings blog covering business tips and trends.
Celebrate! April 24 Is Tax Freedom Day
Published on Apr 24, 2015
By Marcia Richards Suelzer, MA, JD
Today, April 24, 2015, is Tax Freedom day—that glorious day when you start working for yourself, rather than for the government, according to the annual report from the nonpartisan Tax Foundation. Each year the nonprofit Tax Foundation adds up all the federal, state, and local taxes and divides them by the nation’s income to determine when the nation will have earned enough money to pay its total tax bill for the year.
This year, Tax Freedom Day falls 114 days into the year. That’s the number of days Americans must work to pay the $3.28 trillion in federal taxes and $1.57 trillion in state and local taxes that will be owed for 2015. Based on computations by the Tax Foundation, our 2015 national total tax bill is 31 percent of national income—which is more than Americans collectively will spend on food, clothing, and housing combined.
Tax Freedom Day is one day later than last year due mainly to the country’s continued steady economic growth, which is expected to boost tax revenue especially from the corporate, payroll, and individual income tax. Historically, the date for Tax Freedom Day has fluctuated significantly. The latest ever Tax Freedom Day was May 1, 2000 – meaning that Americans paid 33% of their collective incomes towards taxes. After a fairly significant drop during the Bush-era tax cuts, the amount owed is once again inching upward.
April 24, 2015 is "National Tax Freedom" day—but, depending upon where you live—you might already have achieved Tax Freedom. Or, you might have to continue working for the government for a while longer. Louisiana residents “paid” their tax bill on April 2, while residents of Connecticut and New Jersey won’t get their taste of freedom until May 13.
Tax Freedom is more than just an interesting date to note. “Tax Freedom Day gives us a vivid representation of how much we pay for the goods and services provided by governments at all levels,” said Tax Foundation Economist Kyle Pomerleau. “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.”