Americans Must Work Until April 17 This Year Just to Pay for Government

April 3, 2012 - 12:26 PM
Timothy Geithner

U.S. Treasury Secretary Timothy Geithner testifying in the House Budget Committee on Feb. 16, 2012. (AP Photo)

(CNSNews.com) - Americans have until April 17 to file their federal tax returns this year, and ironically, according to the Tax Foundation, the average American will have to work from Jan. 1 until exactly that day just to pay his or her share of the taxes that government will absorb this year.

Each year, the Tax Foundation calculates “Tax Freedom Day.” It determines this date by adding up all the taxes Americans pay to local, state and federal governments, then calculating what those taxes equal as a percentage of the total national income, and then convert that percentage into the equivalent number of days in a 365-day year (compensating for leap years to keep the date comparable for all years).

This year, government will tax away 29.2 percent of the nation’s total income. That means Americans must work from Jan. 1 until April 17 just to produce the income the government will take away.

If the federal government taxed Americans enough to cover the projected $1.014 trillion in deficit spending it will do this year, the Tax Foundation says, Americans would need to work until May 14 to cover the total tax bill.

This year’s April 17 Tax Freedom Day falls seven days later than Tax Freedom Day in 2009, the year President Barack Obama took office. That year, Americans only needed to work until April 10 to produce all the income that government took away in taxes.

According to the Tax Foundation, this year (as in other recent years), Americans will pay more to government in taxes than they spend on groceries, clothing and shelter combined.

Government has become the greatest basic expense that American families face.

Some of the cost of government is obvious to the Americans who pay it—as is the case with income taxes that must be paid directly by small business owners or regularly withheld from the paychecks of workers. Other costs are not so obvious—as is the case with taxes that must be paid by corporations from the proceeds they make from selling their products to the public.

This year, according to the Tax Foundation, Americans will work 32 days to cover the cost of individual federal income taxes and another 8 days to pay state and local individual income taxes.

When they are done paying these taxes, they will have to work another 23 days to cover the cost of federal social insurance taxes that fund programs including Social Security and Medicare.

After that, they will have to work another 9 days to pay for federal income taxes on corporations, and then another day on top of that to pay for state and local taxes on corporations.

Then they will have to work 12 days to pay property taxes.

Then they will have to work another 12 days to pay state and local sales and excise taxes.

Then they will have to work 2 days to pay federal sales and excise taxes.

Once they have worked enough to pay all of these taxes, Americans will have to work 3 days to pay other federal taxes not covered by the above-mentioned categories, and 4 days beyond that to cover other state and local taxes.

Still, partly thanks to the Bush tax cuts which President Obama has thus far extended—but which are set to expire at the end of this year—Americans do not need to work as many days to pay taxes now as they did at the end of Bill Clinton's presidency.

Tax Freedom Day fell deepest into the year in 2000, when it came on May 1.

In 1913, the year that President Woodrow Wilson was inaugurated and the 16th Amendment was ratified—making a direct income tax constitutional—Americans only had to surrender 5.2 percent of the national income to government, according to the Tax Foundation. Tax Freedom Day that year came on Jan. 19.

The filing deadline for federal income tax returns is ordinarily April 15. This year, however, April 15 falls on a Sunday, and Monday, April16 is Emancipation Day, a holiday in the District of Columbia. So, the IRS has extended the tax filing deadline to Tuesday, April 17.