Taxpayers rejoice! Today is national Tax Freedom Day-the day that, according to the Tax Foundation, Americans will have earned “enough money to pay this year’s combined 29.2% federal, state, and local tax bill” and can officially start earning money for themselves.
This year’s Tax Freedom Day actually fell four days later in the year than last year “due to higher federal income and corporate tax collections,” but it’s not as late in the year as it could have been. If the federal government had levied taxes sufficient to close the nation’s $1.014 trillion annual deficit, national Tax Freedom Day would have actually fallen on May 14th (a full 27 days later) instead of today.
Historically speaking, Tax Freedom Day has fallen increasingly later in the year as American’s total tax burden has crept up over the years. While Americans paid near 30 percent of their income in taxes this year, nearly “a century earlier, in 1900, Americans paid only 5.9% of their income in taxes, meaning Tax Freedom Day came on January 22.” A pretty stark contrast.
For Texans, Tax Freedom Day actually fell a little earlier this year on April 11, a full 6 days prior to the national celebration. The reason being is a lower than average state and local tax burden-the state ranks 45th nationally. But Texas’ Tax Freedom Day did not fall the earliest of all the states as Tennessee (March 31), Louisiana (April 1), Mississippi (April 1), South Carolina (April 3), and South Dakota (April 4) all celebrated earlier.
All things considered, it’s good to have finally earned enough to pay off that tax bill!