What Is Tax Freedom Day?
In 2015, Tax Freedom Day landed on April 24th, 114 days into the year. On this day, the nation as a whole has earned enough money to pay its total tax bill for the entire year. So that means all the money you’ve earned up until this day has essentially gone right into Uncle Sam’s pocket. Tax Freedom Day combines all federal, state, and local taxes, and then divides them by the nation’s income. It’s estimated that in 2015 American’s will pay $3.28 trillion in federal taxes, $1.57 trillion in state and local taxes, for a grand total of $4.85 trillion. That’s more than the U.S. will spend on food, clothing, and housing combined.
When Is My State’s Tax Freedom Day?
Each state has it’s own Tax Freedom Day based on the state’s income and tax rate. This means states with higher incomes and higher taxes celebrate Tax Day later. Connecticut (May 13th), New Jersey (May 10th), and New York (May 8th) have the latest dates, while Louisiana (April 2nd) and Mississippi (April 4th) are the earliest. Due to our steady economic growth over the past few years, Tax Freedom Day has over time been gradually pushed back later into the year.
Tax Foundation economists calculate Tax Freedom Day using federal budget projections, data from the U.S. Census and the Bureau of Economic Analysis, and projections of state and local taxes. Tax Freedom Day was created in 1948, by Florida businessman Dallas Hostetler, who handed down the concept to the Tax Foundation when he retired in 1971.
Information provided by Tax Foundation