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In the United States, Tax Day, April 15, marks the deadline for Americans to file their income tax returns for what they earned in the previous calendar year.
Tax Freedom Day, however, marks the day after which the average American begins earning money that he or she can spend on things other than taxes, if we assume that every dollar earned before that day went to pay federal, state and local taxes.
According to calculations by the non-partisan Tax Foundation, in 2015, Tax Freedom Day will fall on April 24, one day later than in 2014. Here are its key findings:
- This year, Tax Freedom Day falls on April 24, or 114 days into the year.
- Americans will pay $3.3 trillion in federal taxes and $1.5 trillion in state and local taxes, for a total bill of more than $4.8 trillion, or 31 percent of the nation’s income.
- Tax Freedom Day is one day later than last year due mainly to the country’s continued steady economic growth, which is expected to boost tax revenue especially from the corporate, payroll, and individual income tax.
- Americans will collectively spend more on taxes in 2015 than they will on food, clothing, and housing combined.
- If you include annual federal borrowing, which represents future taxes owed, Tax Freedom Day would occur 14 days later on May 8.
- 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.
You read that fourth item correctly – in 2015, Americans will collectively pay more in taxes than they do on necessities such as food, shelter and clothing!