The weather is getting warmer, the plants are in bloom, and people are starting to spend more time outside. Yes, it’s springtime, and as we get more comfortable with the season change, one thing continues to put a damper on things — tax day. April 15th will be here before you know it, but do you know exactly how long it took you to pay those taxes? If we add up every tax you have to pay — federal, state, property, etc. — how long would it take? What is the cost of government in the terms of a calendar? The day when you have earned enough money to pay your total tax bill for the year has earned the name Tax Freedom Day.
According to the Tax Foundation, North Carolina taxpayers will experience their Tax Freedom Day on April 14th, four days later than last year. Here are our neighboring states:
- Tennessee, April 5nd
- South Carolina, April 9rd
- Georgia, April 12th
- Virginia, April 24th
The total tax burden imposed on residents of different states varies considerably. The federal tax system is progressive, meaning the more you earn, the more you pay. States also each have their own tax policies, which tax people at different rates and on different sources of income. These two factors are the main reasons why the Tax Freedom Day varies from state to state. For 2014, Connecticut and New Jersey have the latest dates of May 9th, and the earliest is Louisiana on March 30th.
Looking at the nation as a whole, the national Tax Freedom Day is April 21st, or 111 days into the year. This is three days later than last year according to the Tax Foundation, who publishes this data on an annual basis. The later date is mainly due to the continuing economic recovery, which will boost federal tax revenue collected through the corporate, payroll, and individual income tax.
According to the Tax Foundation’s research:
In 2014, Americans will pay $3.0 trillion in federal taxes and $1.5 trillion in state taxes, for a total tax bill of $4.5 trillion, or 30.2 percent of income. The latest ever Tax Freedom Day was May 1, 2000, meaning 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 January 22.
Since 2002, federal expenses have exceeded federal revenues, with the budget deficit exceeding $1 trillion annually from 2009 to 2012 and over $800 billion in 2013. In 2014, the deficit will continue to decline to $636 billion. If we include this annual federal borrowing, which represents future taxes owed, Tax Freedom Day would occur on May 6, 15 days later. The latest ever deficit-inclusive Tax Freedom Day occurred during World War II on May 21, 1945.
If you want to read more about Tax Freedom Day in America for 2014, click here for the Tax Foundation’s full report.
Click here for the Fiscal Update archive.
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