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Tax Freedom Day
Tuesday, 07 April 2009
April 7-- Tax Freedom Day – the date on which Americans will have worked long enough to have earned enough money to pay this year’s tax obligations at the federal, state and local levels – will fall on Sunday, April 12 for residents of Georgia. The date for all Americans will be Monday, April 13.

 

 Georgia’s date is eight days earlier than in 2008. There is an earlier overall date for the nation for two reasons: (1) the recession has reduced tax collections even faster than it has reduced income, and (2) the stimulus package includes large temporary tax cuts for 2009 and 2010. Nevertheless, Americans will pay more in taxes than they will spend on food, clothing and housing combined.

 

In the study, Tax Foundation Special Report No. 165, “America Celebrates Tax Freedom Day,” Tax Foundation staff economist Josh Barro traces the course of America’s tax burden since 1900, examines the composition of today’s tax burden by type of tax, and finally calculates a Tax Freedom Day for each state.

 Comparison: Tax Freedom Day by State

Residents of Alaska will bear the lowest average tax burden in 2009. Because of their modest incomes and extremely low state-and-local tax burden, we estimate Alaska’s Tax Freedom Day for 2009 to be March 23. Louisiana, Mississippi, South Dakota and West Virginia round out the five states that we project will experience Tax Freedom Day earliest in 2009.

The residents of Connecticut will celebrate last, as usual, working until the 120th day of the year, from January 1 to April 30, before earning enough to pay all their taxes. Because Connecticut’s income per capita is higher than in any other state, its residents pay extraordinarily high federal income taxes. Nearby states New Jersey and New York are second and third, respectively. California and Maryland round out the top five.

 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 28.2 percent of our income, and the stretch of 103 days from January 1 to April 13 is 28.2 percent of the year. Income and tax data are then parsed out to the states, yielding 50 state-specific Tax Freedom Days.

 

For more information, go to http://www.taxfoundation.org/taxfreedomday.

 

The Tax Foundation is a nonpartisan, nonprofit organization that has monitored fiscal policy at the federal, state and local levels since 1937.

 
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