CHICAGO — Tax Freedom Day will fall on April 30 this year, according to the Washington-based Tax Foundation’s annual calculation using the latest government data on income and taxes.
The foundation is a non-partisan tax research group that each year calculates the answer to the question: What price is the nation paying for government?
Tax Foundation president Scott A. Hodge and Tax Foundation economist Curtis Dubay determine the date by dividing the figure for total tax collections by the nation’s income. This year, taxes will amount to 32.7% of the nation’s income.
Next, they convert that percentage to days worked. This year, their calculations show that if the average taxpayer started working Jan. 1, it would take until April 30 to pay off their taxes.
Tax Freedom Day comes two days later than it did last year and 12 days later than in 2003, when tax cuts meant that the day arrived April 18.
“Americans will work longer to pay for government (120 days) than they will for food, clothing and housing combined (105 days),” Mr. Hodge said in a statement.
“Since 1986, taxes have cost more than these basic necessities,” he said. “In fact, Americans will work longer to afford federal taxes alone (79 days) than they will to afford housing (62 days).”
Not everyone agrees with the way the foundation calculates the information.
The Washington-based Center on Budget and Policy Priorities criticizes the Tax Foundation’s calculation, for example.
The center thinks that Tax Freedom Day should focus only on the tax burden of the middle one-fifth of earners and ignore the taxes paid by the remaining four-fifths of Americans. The organization also contends that the Tax Foundation’s state and local tax burden amounts are unreliable, because they are based on initial estimates that are later revised.