A Taxing Day


Friday April 25th, 2014   •   Posted by K. Lloyd Billingsley at 7:05am PDT   •  

April 15, the deadline to file returns, looms large on the calendar of many Americans. That date, unfortunately, fails to give taxpayers the full picture of how much of their money government is taking. As the Tax Foundation explains that task falls to Tax Freedom Day, the day when the nation as a whole has “earned enough money to pay its total tax bill for the year.” It is “a vivid, calendar-based illustration of the cost of government.” This year Tax Freedom Day fell on April 21, a full 111 days into the year and three days later than last year. So up to that point, Americans have essentially been working for the government. The government doesn’t give that information to taxpayers. Independent organizations have to provide it.

tax-burden_200In 2014, by the accounting of the Tax Foundation, 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. And the Foundation addresses another item the government ignores: federal borrowing. Since 2002 federal expenses have exceeded federal revenues, pushing annual budget deficits beyond $1 trillion from 2009 to 2012. Federal borrowing represents future taxes owed and pushes Tax Freedom Day to May 6, almost to the point of the latest Tax Freedom Day that included debt, on May 21, 1945. That was just after World War II, when another tax development occurred.

The federal government began withholding tax from workers’ paychecks. This was supposed to be temporary but the government likes getting workers money before they do, so they kept it in place. Any tax refund is simply a worker getting her own money back, and workers continue to toil for the government until April 21, Tax Freedom Day. But workers still aren’t out of the woods. Government is still grabbing their money before they get it and, as this column shows, wasting it on a massive scale. In a weak economy a deeply indebted government is establishing new entitlements such as Obamacare and new federal agencies such as the Consumer Financial Protection Bureau. And politicians resist meaningful reforms such as a flat tax. So in years to come Tax Freedom Day will likely be occurring at even later dates.




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