Posted on 04/12/2009 8:00:54 PM PDT by Libloather
April 20 signifies end of tax burden for year
Group tracks how long it takes to work off what we owe
April 12, 2009 - 10:08 AM
By JAN NORMAN, Orange County Register
Every dime of wages Californians earn until April 20 goes to pay taxes, according to the Tax Foundation, a 72-year-old nonpartisan research organization in Washington, D.C.
That’s seven days longer than the average American has to work, but 10 days fewer than Californians worked to pay all taxes in 2008.
Tax Freedom Day is the day when an employed person earns enough to pay all his or her annual obligations for state and federal income tax, sales and excise taxes, Medicare and Social Security, motor vehicle license tax, property tax and other miscellaneous taxes.
Only three other states have a later Tax Freedom Day than California’s, the foundation says. Connecticut, New Jersey and New York are later.
This is the earliest national Tax Freedom Day since 1967, because the recession has reduced tax collections faster than it has cut income and because and the federal stimulus package includes whopping temporary tax cuts.
Nationally, Americans will pay more in taxes in 2009 than they will spend on food, clothing and housing combined, according to the Tax Foundation.
Americans pay, on average, 28.2 percent of income for taxes. In 1900 they paid 5.9 percent. That is calculated by dividing all federal, state and local taxes ($3.5 trillion in 2009) by total income earned by American workers ($12.4 trillion).
Tax Freedom Day is independent of the federal deficit because of the federal government’s ability to pay for its operations by borrowing, the Tax Foundation says. If the deficit is included, the date moves to May 29.
Florida businessman Dallas Hostetler dreamed up the idea of Tax Freedom Day in 1948. The Tax Foundation took over the annual tally when Hostetler retired in 1971.
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