(CNSNews.com) – The tax increases scheduled to take effect in January 2013 – dubbed Taxmageddon – could have the American people spending more days than ever working to pay for federal and state government, a report from the Tax Foundation shows.
A host of tax rates are scheduled to rise in January 2013 – when George W. Bush-era tax rates and the annual patch for the Alternative Minimum Tax expire – leading to a tax increase of approximately $500 billion in 2013, according to the conservative Heritage Foundation.
The Congressional Budget Office reported in January that taxes would increase by $4.6 trillion over ten years, if Congress allows the rates to rise as scheduled at the end of this year.
Tax Foundation economist William McBride estimated that this historic tax increase would push Tax Freedom Day to its latest point ever.
Tax Freedom Day is the day when – theoretically – Americans begin working for themselves and can stop paying for government. It assumes that 100 percent of a person’s wages go to paying for federal and state tax burdens. The day when government operations are fully paid for is Tax Freedom Day.
In 2012, Tax Freedom Day was April 17. However, Taxmageddon may push it until the end of April or beyond, McBride reported in a blog post on the foundation’s website. At the federal level, the 2012 tax increases would add 11 days to the Tax Freedom Day calculation, pushing it to April 28.
Adding in rising state and local tax revenues could push Tax Freedom Day beyond its May 1 record.
The Taxmageddon provisions adding to the cost of government – measured in the days that Americans will spend paying for it – are as follows:
Bush tax rates – 2.6 days
Alternative Minimum Tax – 2.2 days
Small business tax cuts – 0.4 days
Corporate income tax – 3.4 days
Payroll tax cut – 2.5 days
Estate tax – 0.2 days