Taxes and freedom — you now work for ‘the man’ a little longer

Think you’re done working for “the man.” Oh no, my friend. You’ve got at least another week or two, depending on where you live.

Tax Freedom Day this year is April 18 nationwide. That’s the day when the average American has earned enough since Jan. 1 to pay “the tax man” for all the state and local taxes he or she is obligated to pay the entire year. That is, assuming you had put every penny of your income toward nothing else than your tax bill from the start of the year.

What’s worse is that this year freedom day comes five days later than last year.

Why is this? Well, the Tax Foundation, the Washington-based tax research group that calculates Freedom Day puts it this way:

“Tax Freedom Day is five days later than last year, due mainly to the

fiscal cliff deal that raised federal taxes on individual income and

payroll. Additionally, the Affordable Care Act’s investment tax and

excise tax went into effect.”

Ah yes, Obamacare is starting to kick in.

And, as every working American already knows, taxes have gone up since New Year’s Day.

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There is some good news. The economy is continuing to grow, which will over time “boost profits, incomes and tax revenues.”

I recommend going to the Tax Freedom Day web site, which you can do by clicking this text. Once there, you can find a state-by-state list of freedom days. Each state’s is different, just as each state and local government has different tax rates.

In Utah, where this blog originates, Freedom Day is April 13, the 26th latest in the union. Connecticut is No. 1 at May 13. Mississippi and Louisiana residents tie for the earliest freedom at March 29. Those folks already are free.

Also of interest, the Tax Foundation has a separate calculation for Freedom Day if Americans had to retire the budget deficit, which represents taxes owed in the future. That date is May 9.

So what is the significance of all these dates? It’s all in the historical perspective.

The web site provides a spreadsheet showing Tax Freedom Day going back to 1900. If you look only at the last 50 years or so, you would think the nation is doing pretty good. In 1963, Freedom Day was April 13. It’s been as late as May 1, which was in 2000.

Fair enough, but go back 100 years and you’ll discover Freedom Day on Jan. 19. That year, 1913, was the year the Constitution was amended to allow an income tax.

The lesson here has to do with conditioning. World wars pushed the date farther into the year, but when the soldiers retreated, Tax Freedom Day did not. Americans became conditioned.

A Gallup poll conducted last year found 47 percent of Americans believing their tax burden to be about right, and 3 percent saying it was too low. Only 46 percent said it was too high. (Read the poll by clicking this text.)

I wonder what a similar poll would have shown in 1913 if people suddenly had to pay as much as they do today. I wonder what they would have thought if they knew that even what we pay today ($2.76 trillion in federal taxes) comes nearly $1 trillion short of covering Washington’s expenses.

No, we’re not paying enough to cover what our government is spending. But we’re paying 29.4 percent of what we earn on all government taxes. Does that sound about right to you?

About the Author

Jay Evensen

Jay Evensen is the Senior Editorial Columnist for the Deseret News. He has 32 years of journalism experience covering politics and a variety of other assignments at news organizations ranging from United Press International in New York City to the Las Vegas Review-Journal and the Deseret News, where he has worked since 1986. During that time, he has won numerous local, regional and national awards. Most recently, he was given the Cameron Duncan Media Award, given annually in Washington, D.C., by the advocacy group RESULTS, to the journalist judged to have done the most to further the cause of the world's poorest people.

3 comments

  1. 10cc

    The optimal level of taxation is an open question – there are many other nations to compare with. What are the key factors to consider? We have a large defense obligation, much, much larger than any other nation, by far. How much should we be spending on defense? How much should we be spending on healthcare, and what social and individual benefits should we be seeing from these expenditures?

    How much should we be spending on education? Certainly the case could be made that in Utah we should be paying more taxes to reduce classroom sizes, especially as our demographics become more diverse from the historic Utah model of 2 parent families with a stay at home mom, a situation that has allowed us to get greater bang for the tax buck in education. If we don’t reduce class sizes and do other things to prevent kids from falling through the cracks it will absolutely bite us in the future.

    Looking at other nations, maybe our closest cousin is Canada, where taxes are about 38% of GDP, about 10% higher than ours of 29%. The Canucks are more tightly regulated, mostly dodged the Great Recession we’re still trying to shake off, and in spite of higher tax rates they score quite highly on indices of economic freedom, in fact surpassing the US on the index from the conservative Heritage Foundation.

  2. merich39

    There are countries with much much lower tax rates than the U.S. They are typically referred to as third world countries.

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