Happy Tax Freedom Day
Good morning America! Wherever you are it is a beautiful day because for the first time in 2010 you are truly free! According to the Tax Foundation from January 1, 2010 until April 9, 2010 you were working for the government--federal, state, county, school district, city, park district, arts district...
Yep, all the money you earned during this time--over a quarter of your income--was turned over to the government in the form of taxes."Americans will pay more taxes in 2010 than they will spend on food, clothing and shelter combined," according to the Tax Foundation.
Compared to last year
This year's Tax Freedom Day is one day later than in 2009, but more than two weeks earlier than in 2007. The shift toward a lower tax burden since 2007 has been driven by three factors: (1) The recession has reduced tax collections even faster than it has reduced income; (2) President Obama and the Congress have enacted large but temporary income tax cuts for 2009 and 2010, just as President Bush did in 2008; and (3) Two significant taxes were repealed for 2010 as part of previous legislation, the estate tax and the so-called PEP and Pease provisions of the income tax.
What are the major taxes?
Five major categories of taxes dominate the tax burden. Individual income taxes-including federal, state and local-require 32 days' work. Payroll taxes take another 25 days' work. Sales and excise taxes, mostly state and local, take 15 days to pay off. Corporate income taxes take 8 days, and property taxes take 12. Americans will log 6 more days to pay other miscellaneous taxes, most notably including motor vehicle license taxes and severance taxes, and about half a day for estate taxes.
But this is assuming everyone pays his/her fair share of taxes. But they don't--especially income taxes. As Mark Steyn explains:
And yet for an increasing number of Americans tax season is like baseball season: It's a spectator sport. According to the Tax Policy Center, 47% of U.S. households will pay no federal income tax for the year 2009. Obviously, many of them pay other kinds of taxes - state tax, property tax, cigarette tax.
But at a time of massive increases in federal spending half the country is effectively making no contribution to it, whether it's national defense or vital stimulus funding to pump monkeys in North Carolina full of cocaine (true, seriously, don't ask me why).
Half a decade back, it was just under 40% who paid no federal income tax; now it's just under 50%.
And by the way, if you are one of the 53% who pays income taxes, your 2009 income taxes are due in a few days.