Tax Freedom Day arrives Sunday
WASHINGTON — Iowa’s Tax Freedom Day, the day on which Iowans have collectively earned enough income to pay off their total federal, state and local tax bill, will arrive Sunday this year, making it the 18th state to reach Tax Freedom Day.
According to the annual report released this morning by the nonpartisan Tax Foundation, national Tax Freedom Day falls on April 21, three days later than last year.
The states with the earliest Tax Freedom Days are Louisiana on March 30, Mississippi on April 2 and South Dakota on April 4.
The latest dates fall in New Jersey on May 9, Connecticut on May 9 and New York on May 4.
The study’s key findings include:
• The national Tax Freedom Day is three days later than last year due mainly to the continuing economic recovery, which will boost federal tax revenue collected through the corporate, payroll and individual income tax.
• Americans will spend more on taxes in 2014 than they will on food, clothing and housing combined.
• Americans will spend 42 days working to pay off income taxes, 15 days for excise taxes and 11 days for property taxes.
• Americans will pay $3 trillion in federal taxes and $1.5 trillion in state and local taxes, for a total bill of more than $4.5 trillion or 30.2 percent of the nation’s income.
• Include annual federal borrowing, which represents future taxes owed, and Tax Freedom Day would occur on May 6, 15 days later.
Tax Freedom Day is a significant date for taxpayers and lawmakers because it represents how long Americans as a whole have to work in order to pay the nation’s tax burden.
“Arguments can be made for why the collective tax bill is too high or too low, but in order to have an honest discussion, it’s important to understand where we stand,” said Tax Foundation Economist Kyle Pomerleau. “Tax Freedom Day gives us a vivid representation of how much we pay for the goods and services provided by governments at all levels.”
Historically, the date for Tax Freedom Day has fluctuated significantly. The latest-ever nationwide Tax Freedom Day was May 1, 2000 – meaning that Americans paid 33.0 percent of their total income in taxes. A century earlier, in 1900, Americans paid only 5.9 percent of their income in taxes, meaning Tax Freedom Day came on Jan. 22.
For the full report: Tax Freedom Day 2014, visit the website http://taxfoundation.org/article/tax-freedom-day-2014-april-21-three-days-later-last-year.