Ready for a little relief? Sunday marks the Tax Foundation’s “Tax Freedom Day” in Texas — the day when we stop working for the government and start working for ourselves. That’s a little better than last year, when Tax Freedom Day fell on April 18 in Texas.
It’s an abstraction, of course, but it’s a useful abstraction. So many of our taxes are taken from us in inconspicuous ways that it’s good to have a visual to show just how much of our income we’re actually paying.
“Arguments can be made for why the collective tax bill is too high or too low, but in order to have an honest discussion, it’s important to understand where we stand,” said Tax Foundation Economist Kyle Pomerleau. “Tax Freedom Day gives us a vivid representation of how much we pay for the goods and services provided by governments at all levels.”
The national Tax Freedom Day is April 18 this year (that’s Good Friday), so we’re a little better off in Texas. Folks in Connecticut have to work until May 9 in order to pay off what they owe to the government.
The states with the earliest Tax Freedom Days are Louisiana (March 30), Mississippi (April 2) and South Dakota (April 4).
“Tax Freedom Day has not always been this late in the year,” the Foundation notes. “World War I tax increases led to a jump in Tax Freedom Day from 1917’s Jan. 24 to 1918’s Feb. 8 to 1921’s Feb. 22. In the 1920s, when Justice Oliver Wendell Holmes described taxes as the price of civilized society, Tax Freedom Day was arriving in February.”
The latest it’s ever arrived nationally is May 1, 2000 — which signifies that Americans paid 33 percent of their total income in taxes.
That’s the year that George W. Bush was elected on the promise of tax relief. He delivered, and by 2003, Tax Freedom Day had been pushed back to April 14.
“A century earlier, in 1900, Americans paid only 5.9 percent of their income in taxes, meaning Tax Freedom Day came on January 22,” the Foundation added.
We’re not just talking about federal taxes.
“Americans will pay $3 trillion in federal taxes and $1.5 trillion in state and local taxes, for a total bill of more than $4.5 trillion, or 30.2 percent of the nation’s income,” the Foundation says.
Critics of Tax Freedom Day say the focus shouldn’t be just on how much we pay, it also should be on what we receive — the services and infrastructure that benefit us all.
And that’s true.
We certainly agree with Justice Holmes about the necessity of taxes to fund important government functions.
But taxes are still a burden, however justifiable. It’s not the government spending we object to; it’s the dumb government spending. It’s the waste and fraud that force us to work longer for the government and less for ourselves.
Knowing the scope of how much we pay is a good starting point.
Tax Freedom Day should serve as a reminder that all those political promises come with a price tag.