Tax Day Other Kinds Of Answers…

Maybe just to see a brighter perceive of other answers, as far as taxes goes, here is a semi-holiday from my own calendar, which I hope by sharing and telling everyone about will help in these days when there seems so little. Always remember, it is when the times are the toughest, the other kinds of answers are both most needed and the easiest to find.  Read on...

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America Celebrates Tax Freedom Day® April 13^th, 2009
America Will Work 8 Days Less to Pay Taxes in 2009 than in 2008; Recession, Stimulus Package Push Date of Celebration Up

Read the full Tax Freedom Day report here.

Washington, DC, March 31, 2009 - Tax Freedom Day will arrive on April 13 this year, according to the Tax Foundation's annual calculation using the latest government data on income and taxes.

This is eight days earlier than in 2008, and a full two weeks earlier than in 2007, 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.

Taxes and Federal Deficit

Tax Freedom Day moves somewhat independently from an alternative calculation that adds the federal budget deficit to total taxes collected. In 2009, an unprecedented budget deficit over $1.5 trillion produces a date of May 29. This is the latest date in the year this deficit-inclusive measure has ever fallen. The only previous years when taxes and deficit spending comprised a similarly large share of national income were 1944 and 1945, at the peak of World War II. In the postwar era, this date had never fallen later than May 9 (in 1992). Figure 1 below shows Tax Freedom Day as traditionally presented and with the inclusion of the federal budget deficit, since 1967 (click to enlarge).

Tax Freedom Day Fluctuations in Recent Years and Predictions for the Near Future

In 2000, Tax Freedom Day was celebrated May 3, the latest date ever. A string of tax cuts between 2001 and 2003 pushed Tax Freedom Day up by more than two weeks, so that it fell on April 16 in 2003 and April 17 in 2004. For the next three years, incomes and tax collections soared, pushing Tax Freedom Day back to April 26 in 2007.

Since 2006, corporate tax revenues have fallen sharply and are projected to do so again in 2009. Personal income taxes also fell in 2008 and are expected to fall again in 2009 due to the weakening economy and tax cuts in the stimulus package. Because most of this year's stimulus package's tax cuts continue through 2010, Tax Freedom Day could be expected to shift later by a few days next year only if the economy improves. For 2011, both the stimulus package's tax cuts and the earlier Bush tax cuts of 2001 and 2003 are set to expire. The future timing of Tax Freedom Day will depend on which tax cuts Congress and the Obama Administration choose to extend through 2011 and thereafter.

Which Taxes Are the Biggest?

Five major categories of tax dominate the tax burden. Individual income taxes, both federal and state, require 38 days' work. Payroll taxes take another 27 days' work. Sales and excise taxes, mostly state and local, take 15 days to pay off. Corporate income taxes take 6 days, and property taxes take 12. Americans will log 4 more days to pay other miscellaneous taxes, most notably including motor vehicle license taxes and severance taxes, and about 1 day for estate taxes.

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.

Tax Freedom Day by State, 2009
State	Days Spent Working to Pay Taxes	Tax Freedom Day	Rank
United States	103	April 13	---
Alabama	92	April 2	44
Alaska	82	March 23	50
Arizona	100	April 10	23
Arkansas	94	April 4	37
California	110	April 20	4
Colorado	102	April 12	16
Connecticut	120	April 30	1
Delaware	101	April 11	20
Florida	99	April 9	27
Georgia	102	April 12	17
Hawaii	103	April 13	14
Idaho	102	April 12	18
Illinois	103	April 13	15
Indiana	98	April 8	28
Iowa	94	April 4	39
Kansas	98	April 8	30
Kentucky	93	April 3	41
Louisiana	87	March 28	49
Maine	96	April 6	33
Maryland	109	April 19	5
Massachusetts	106	April 16	7
Michigan	100	April 10	24
Minnesota	105	April 15	9
Mississippi	87	March 28	48
Missouri	96	April 6	34
Montana	93	April 3	42
Nebraska	98	April 8	31
Nevada	98	April 8	29
New Hampshire	100	April 10	22
New Jersey	119	April 29	2
New Mexico	92	April 2	43
New York	115	April 25	3
North Carolina	99	April 9	25
North Dakota	91	April 1	46
Ohio	101	April 11	21
Oklahoma	94	April 4	40
Oregon	99	April 9	26
Pennsylvania	104	April 14	11
Rhode Island	104	April 14	10
South Carolina	94	April 4	38
South Dakota	88	March 29	47
Tennessee	95	April 5	36
Texas	96	April 6	32
Utah	103	April 13	13
Vermont	102	April 12	19
Virginia	106	April 16	6
Washington	106	April 16	8
West Virginia	91	April 1	45
Wisconsin	103	April 13	12
Wyoming	95	April 5	35
District of Columbia	103	April 13	---

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.

Tax Freedom Day: Origin and Methodology

Tax Freedom Day was conceived by Florida businessman Dallas Hostetler in 1948. He performed the calculation himself and promoted his copyrighted concept until his retirement in 1971. He deeded the intellectual property to the Tax Foundation, and since then the Tax Foundation has used historical data to calculate Tax Freedom Day back to the beginning of the 20th century. In 1990 sufficient data became available to calculate a separate Tax Freedom Day for each state.

Tax Freedom Day is a vivid, calendar based illustration of government’s cost, and it gives Americans an easy way to gauge the overall tax take. We count every dollar that is officially part of national income according to the Department of Commerce’s Bureau of Economic Analysis, and every payment to the government that is officially considered a tax is counted. Taxes at all levels of government are included, whether levied by Uncle Sam or state and local governments. We assume that the nation starts working on January 1, earning the same amount each day and spending nothing. When the nation has finally earned enough to pay all the taxes that will be due for that year, Tax Freedom Day has arrived.

 

For more information and a full copy the report,
go to http://www.taxfoundation.org/publications/show/93.html.