Tax Freedom Day Three Days Later Than Last Year
April 11, 2014
Tax Freedom Day is the day when the United States has earned enough money to pay its total tax bill for the year. Federal, state and local taxes are divided by the nation's income, and when that figure equals that year's tax burden, the day is designated Tax Freedom Day. Last year, Tax Freedom Day fell on April 18. This year it will arrive on April 21. Americans will spend more on taxes in 2014 than on food, clothing and housing combined, say Kyle Pomerleau and Lyman Stone, economists at the Tax Foundation.
- By including federal borrowing -- because federal expenses have exceeded revenues annually since 2002 -- Tax Freedom Day would not come until two weeks later, on May 6.
- The latest that the day has ever fallen, including these deficit figures, was on May 21, 1945, during World War II.
- April 21 is just an average -- individual states have their own Tax Freedom Days at different times. Louisiana residents bear the lowest tax burden this year, with Tax Freedom Day on March 30. But for Connecticut and New Jersey residents, the date is May 9.
- Not including the deficit, the latest Tax Freedom Day was May 1, 2000, when Americans forked over 33 percent of their income to federal, state and local taxes.
The day has definitely changed over time. Contrast the 2000 figures with 1900, when American paid just 5.9 percent of their income in taxes. That year, Tax Freedom Day came on January 22.
- With the arrival of World War I, the day jumped, moving from January 24 in 1917 up to February 22 in 1921.
- With the Great Depression and corresponding tax increases from Presidents Hoover and Roosevelt, the United States also saw greater federal tax collection. In 1932, Americans spent 10 days paying federal taxes and 46 paying state and local taxes. Just eight years later, in 1940, Americans worked 33 days to pay taxes to each.
- With World War II, Tax Freedom Day came in April for the first time, in 1943. Since then, the federal tax burden never dropped to its levels before the war.
- By 1981, the day came on April 24. That same year, President Reagan signed into law a tax cut, and the economy boomed, leading to higher tax collections. In 1989, Tax Freedom Day was April 22, with federal tax revenues higher (as a share of the economy) than in almost all prior years.
- After the May 1, 2000 Tax Freedom Day -- the latest one ever -- taxes were cut, and the 2003 Tax Freedom Day came two weeks earlier, on April 14.
Source: Kyle Pomerleau and Lyman Stone, "Tax Freedom Day® 2014 is April 21, Three Days Later Than Last Year," Tax Foundation, April 7, 2014.
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