How Much of the Year Do Your Taxes Cost?

CascadeNewLogoBy Kathryn Hickok

If every penny earned since the beginning of the year went to pay federal, state, and local taxes, Americans would have to work until the middle of April just to cover their tax bills. Tax Freedom Day is a calendar-based illustration of the cost of government which divides all taxes by the nation’s income. By this calculation, Americans typically work more than a hundred days a year, and pay about a third of their earned income, to all levels of government.

But this is only what Americans actually pay, not what government spends. If annual federal borrowing were taken into account, representing future taxes owed, Tax Freedom Day wouldn’t occur until May. That’s more than two weeks of federal government spending paid for by borrowing.

Americans 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.

  • thevillageidiot

    and there are readers of this blog that are convinced we do not pay enough in taxes. That taxes for all should be increased until the government collects as much as Sweden. which pushes the tax freedom day out to June, July, August working for the master of the plantation.

    • DavidAppell

      Sweden has a much lower debt than does the US:

      Sweden: 39% of GDP
      US: 103% of GDP

    • Peron can Hillary in Argentina

      Please take your charts and embark on a Ross Perot mission pose-able as a Feared Party candidate and setting the POTUS selection into the hands of the House where BHO cannot further diddle and piddle upon.

  • MrBill

    There have been a lot of adjustments to tax rates over the decades designed to generate more revenue, but only 15-20% of GDP is ever generated. In the meantime, gov’t spending has been above 20% of GDP since WWII ended. It’s been in the range of 30-40% of GDP for the last 20 years.

    Somehow spending needs to be reduced to 20% of GDP to avoid some really serious repercussions at some point in the future. And this needs to include service of existing debt.

    • DavidAppell

      In fact, B Clinton brought govt spending way down. Then Bush Jr gave it to rich people:

      • DavidAppell

        As this graph shows, fed govt spending is back to Reagan-era levels.

        • MrBill

          Spending has been 30-35% of gdp since 1980. Even during the “glory days” of Clinton it never dropped below 30%.

          • DavidAppell

            You’re talking about all govt spending, with Clinton responsible only for the federal part. Total govt spending spiked in 2010 to almost 40% (thanks Bush Jr), and is now back down to Reagan-era levels:


          • MrBill

            To the bigger issue, we’ve still seen tax revenues in the range of 20-25% of GDP while spending has been in the range of 30-35%. If state and local are balancing, then the problem mostly lies at the federal level and they must be greater than 50% over budget. Given that they’re not going to be able to get a share of state and local revenues, and they’re probably not going to be able to increase their own revenues enough to overcome their deficit, they need focus of spending reductions. I have some ideas of what they could do. They could start with:

            -Eliminate all farm subsidies
            -Eliminate the Dept. of Education
            -Eliminate the Dept. of Energy

            And then they need to do something with unsustainable entitlement programs like Social Security, Medicare, Medicaid, and Obamacare. Dealing with these will be very unpopular, but the longer they wait to deal with them, the harder it will be.

          • DavidAppell

            “To the bigger issue, we’ve still seen tax revenues in the range of 20-25% of GDP….”


            They’re in the range 26-30%:


          • MrBill

            This is total gov’t revenue (local, state, federal). We can argue about 20-25 vs 29-30, but it’s still the same problem. Federal gov’t spends more than it takes in. Despite a range of rate structures, revenue has been mostly stable. The likelihood of increasing revenues by 50% or more to match spending so they need to look at spending reductions.


          • DavidAppell

            “We can argue about 20-25 vs 29-30….”

            No we can’t. My numbers are significantly higher than yours, and my numbers are correct.

          • Roger Enout

            Upperware your alley with Allen. Dem conjugate with what’s best for Oregon, ewe sheep of antipathy, monsewer.

          • DavidAppell

            “Despite a range of rate structures, revenue has been mostly stable.”

            That’s false, just like all of your claims:


          • MrBill

            If you exaggerate the vertical scale enough and use a little judgement in how you set your upper and lower limits, you can make it look as unstable as you’d like.

          • DavidAppell

            We aren’t talking about tax rates, corporate or capital gains, but about expenditures.

          • DavidAppell

            “Federal gov’t spends more than it takes in.”

            Certainly. The red states — which get a disproportionate amount from the federal government — like getting all that money, but don’t like being taxed for it.


          • MrBill

            Whether spending cuts affect red or blue states more is irrelevant. Reductions in spending are needed regardless.

          • DavidAppell

            Then let’s start cutting all the extra money going to the red states. Watch them howl….

          • DavidAppell

            They could start with:
            – Eliminate all farm subsidies
            – reduce bloated military spending
            – increase the obscenely low tax rates on the rich (especially capital gains and the hedge fund managers loophole)

          • Conservatively Speaking

            Not Soros you slated that monsewer. Knot.

      • MrBill

        From your chart, gov’t spending had been dropping since a high in 1984 or so with an uptick under Bush Sr. which continued under Clinton into 1992. I think the Republican majorities in the House and Senate elected in the 92 elections deserve much of the credit for the reductions after 1992. To imply that Clinton somehow singlehandedly reigned in spending is simply not the case.

        Bush Jr. gave it all to rich people? How so? I don’t recall rich people getting checks from Bush Jr.

  • DavidAppell

    Kathryn, do you ever bother yourself with facts?

    In fact, the money spend on U.S. governments is basically flat since the Great Recession:

    In fact, spending on govt is now back to Ronald Reagan levels: