Tax Freedom Day comes a little later this year

By David Hoffman

In an effort to illustrate just how much people pay in taxes, the non-partisan Tax Foundation declared today “Tax Freedom Day.”

Tax Freedom Day marks the point in the year at which U.S. citizens’s have worked enough to pay all their tax obligations for the current year. The tab includes federal, state and local taxes.

This year’s Tax Freedom Day is one day later than in 2009. It’s more than two weeks earlier than in 2007, however.

The shift toward a lower tax burden since 2007 has been driven by three factors, the foundation said in a statement.

First off, the recession has reduced tax collections even faster than it has reduced income. Plus, President Barack Obama and Congress have enacted large — but temporary — income tax cuts for 2009 and 2010, much like President George W. Bush did in 2008. Moreover, two significant taxes were repealed for 2010 as part of previous legislation: the estate tax and the so-called PEP and Pease provisions of the income tax.

Despite these tax reductions, Americans will pay more taxes in 2010 than they will spend on food, clothing and shelter combined, according to the foundation.