America Will Work One Day More for Government in 2010 than in 2009; Recession and Tax Cuts Have Made Tax Freedom Earlier
Tax Freedom Day will arrive on April 9 this year, the 99th day of 2010, according to our annual calculation using the latest government data on income and taxes. Americans will work well over three months of the year—from January 1 to April 9—before they have earned enough money to pay this year’s tax obligations at the federal, state and local levels.
This year’s Tax Freedom Day is one day later than in 2009, but more than two weeks earlier than in 2007. The shift toward a lower tax burden since 2007 has been driven by three factors: (1) The recession has reduced tax collections even faster than it has reduced income; (2) President Obama and the Congress have enacted large but temporary income tax cuts for 2009 and 2010, just as President Bush did in 2008; and (3) Two significant taxes were repealed for 2010 as part of previous legislation, the estate tax and the so-called PEP and Pease provisions of the income tax.
Despite all these tax reductions, Americans will pay more taxes in 2010 than they will spend on food, clothing and shelter combined.
|Tax Freedom Day by State, 2010|
|State||Days Spent Working to Pay Taxes||Tax Freedom Day||Rank|
|United States||99||April 9||–|
|New Hampshire||86||April 6||28|
|New Jersey||115||April 25||2|
|New Mexico||91||April 1||45|
|New York||113||April 23||3|
|North Carolina||97||April 7||26|
|North Dakota||93||April 3||39|
|Rhode Island||102||April 12||12|
|South Carolina||93||April 3||40|
|South Dakota||88||March 29||47|
|West Virginia||89||March 30||46|
|District of Columbia||105||April 15|
How Tax Freedom Day Is Calculated
Tax Freedom Day answers the basic question, “What price is the nation paying for government?” An official government figure for total tax collections is divided by the nation’s total income. The answer this year is that taxes will amount to 26.89 percent of our income, and the stretch of 99 days from January 1 to April 9 is 26.89 percent of the year. Income and tax data are then parsed out to the states, yielding 50 state-specific Tax Freedom Days.
reposted from the NTU