Each year, most Americans refer to April 15 as Tax Day. That’s understandable given the reality that April 15 is typically the deadline for filing income tax returns; so, many people use it as a target date of sorts.
Despite that practice, there is a more important date for every citizen: Tax Freedom Day.
That’s the day when each of us has earned enough income to pay our tax liability to government at all levels.
Since Tax Freedom Day varies for each of us given the variables involved, the good work with data analysis by the Tax Foundation in Washington, D.C. gives us insight and the opportunity to compare tax burdens by state.
Before you continue to read, take note of the date you are actually reading this column, as well as your state of residence.
This year, nationally, Tax Freedom Day is April 13. There is good news, and bad, with this year’s date.
The good news is that April 13 is eight days earlier than last year, and 14 days earlier than 2007.
But, the bad news is also the reasons for this year’s earlier date. First, the economic downturn has reduced tax collections even faster than it has reduced income; and, second, the federal stimulus includes large temporary tax cuts for 2009 and 2010.
Still, the average taxpayer will work their first 103 days of 2009 for the government to cover their tax burdens to government. To put that in perspective, Americans will pay more in taxes than they will spend on food, clothing, and housing combined.
Don’t want to think of yourself as ‘average’?
OK; you just might be above, or below, average – as a U.S. taxpayer.
Thanks to the Tax Foundation, we can also look at taxpayer data by state to find the answer for you.
If you reside in the District of Columbia, Hawaii, Illinois, Wisconsin or Utah, you are ‘average’ in that April 13 is Tax Freedom Day for you and the average U.S. taxpayer this year.
But, live in any of the other 46 states, your total federal and state tax bill will be either: better, that is you pay less than the national average, which places you in the above average taxpayer category; or worse, that is you pay more than the national average, which places you in the below average taxpayer category.
Want to hone in on your situation? Here are some hard general facts for your personal reference.
Live in any of 35 states and you are doing better than average. Examples include: Tennessee (April 5), Texas (April 6), Florida (April 9), Delaware (April 11), et al.
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