“Tax Freedom Day is the day when the nation as a whole has earned enough money to pay its federal, state, and local tax bill for the year,” explained the Tax Foundation. “Tax Freedom Day takes all federal, state, and local taxes and divides them by the nation’s income. In 2015, Americans will pay $3.28 trillion in federal taxes and $1.57 trillion in state and local taxes, for a total tax bill of $4.85 trillion, or 31 percent of national income. This year, Tax Freedom Day falls on April 24, or 114 days into the year.
“This year, Americans will work the longest to pay federal, state, and local individual income taxes (43 days),” the report stated. “Payroll taxes will take 26 days to pay, followed by sales and excise taxes (15 days), corporate income taxes (12 days), and property taxes (11 days). The remaining 7 days are spent paying estate and inheritance taxes, customs duties, and other taxes.
“Tax Freedom Day is a significant date for taxpayers and lawmakers because it represents how long Americans as a whole have to work in order to pay the nation’s tax burden,” explained the Tax Foundation.
The Tax Foundation calculates the Tax Freedom Day for the nation as well as each of the states. While the national Tax Freedom Day arrives nine days after the tax filing deadline of April 15, Tax Freedom Day arrives earliest in Louisiana on April 2 and Mississippi on April 4. Connecticut and New Jersey will have their Tax Freedom Day even later than the nation’s on May 13. The attached chart shows each state’s Tax Freedom Day.
“Tax Freedom Day gives us a vivid representation of how much we pay for the goods and services provided by governments at all levels,” said Tax Foundation Economist Kyle Pomerleau. “Arguments can be made that the tax bill is too high or too low, but in order to have an honest discussion, it’s important for taxpayers to understand cost of government. Tax Freedom Day helps people relate to that cost.”