Friday January 24, 2020
April 16 is Tax Freedom Day
Tax Freedom Day is determined by a simple division of all federal, state and local taxes by the nation's income. The government revenue is from individual, corporate, property, sales and excise taxes.
The total amount of federal tax that Americans will pay this year is $3.4 trillion. State and local taxes will total $1.8 trillion. The combined total is $5.2 trillion, which is 29% of the nation's income. Federal and state taxes this year are the same as 2018, due in part to the Tax Cuts and Jobs Act.
The total taxes of $5.2 trillion that Americans will pay this year exceeds the $5.1 trillion that Americans will pay for food, shelter and clothing. Americans are expected to spend $2 trillion for food, $300 billion for clothing and $2.8 trillion for housing this year.
If the federal deficit is included in the calculation, Tax Freedom Day is extended 22 days to May 8. This is 17 days earlier than the latest spending and deficit Tax Freedom Day in U.S. history, which was May 25, 1945. This day reflected higher spending during World War II.
Tax Freedom Day may also be calculated for high and low tax states. The dates for high-tax states are May 3 in New York, April 30 in New Jersey and April 25 in Connecticut. Tax Freedom Day for the lowest tax states are March 25 in Alaska, March 30 in Oklahoma and April 4 in Florida and Louisiana.
Editor's Note: Tax Freedom Day has been calculated each year for several decades. It provides a comparison of government spending for different years. Other Washington organizations have suggested an expanded calculation to determine Tax Freedom Day by taxpayer income levels. If other organizations report Tax Freedom Day by income levels, your editor will publish that data.