Tax Freedom Day arrives this year on April 24, six days later than it was two years ago. Tax Freedom Day is a calendar-based measure of Americans’ cumulative tax bill. It is calculated as the day on which Americans have worked long enough to pay all their taxes. Americans will have worked 114 days to earn enough money to pay this year’s combined federal, state, and local taxes. These taxes include personal income taxes, payroll taxes, corporate income taxes, and property and sales taxes.
However, this is only what Americans actually pay, not what government spends. According to the nonpartisan Tax Foundation, “Since 2002, federal expenses have surpassed federal revenues, with the budget deficit exceeding $1 trillion annually from 2009 to 2012 and over $800 billion in 2013….If we include…annual federal borrowing, which represents future taxes owed, Tax Freedom Day would occur on May 8….”
Americans currently pay more in taxes ($4.85 trillion) than they do on food, clothing, and housing combined. The saying goes, you should “work to live, not live to work.” But the more government grows, the more Americans are working less to live and more to pay for runaway government spending. That leaves fewer resources to invest in the real engines of economic growth: private sector businesses that create jobs and produce goods and services for a market fueled by Americans’ hard-earned purchasing power.
Kathryn Hickok is Publications Director at Cascade Policy Institute, Oregon’s free market public policy research organization.