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Bad news for taxpayers: Freedom comes later

The average Coloradan will work an additional two days this year to earn enough money to pay their taxes, according to the latest results of an annual calculation. Meanwhile, the average American will work five days longer in 2013 than they did in 2012.

Tax Freedom Day will arrive on April 17 in Colorado and April 18 in the United States. That’s the day when the average person has earned enough money to pay their local, state and federal taxes for the year.

The Tax Foundation — a nonprofit group in Washington, D.C., that monitors government fiscal policy — attributed the delay in Tax Freedom Day to a combination of higher taxes and incomes. Federal income and payroll taxes have increased. And federal health care legislation imposes higher investment and excise taxes. At the same time, incomes also have increased as the U.S. economy has recovered. Under a progressive tax system, those with higher incomes pay a larger proportion of that income in taxes.

For 2013, Coloradans will work 107 days to earn enough money to pay their taxes, a period that ranks 15th longest among the states. Tax Freedom Day arrived earliest at March 29 in Louisiana and Mississippi.

Residents of Connecticut won’t celebrate Tax Freedom Day until May 13.

Tax Freedom Day varies substantially from state to state as result of different tax policies and income levels.

The tax bill at all levels for 2013 totals $4.2 trillion, or about 29.4 percent of total income. “That means Americans will pay more in taxes in 2013 than they will spend on food, clothing and housing combined,” said William McBride, an economist who helped calculate Tax Freedom Day.

Individual income taxes at the federal, state and local levels account for the biggest proportion of the tax burden in requiring 40 days of work to pay off. Payroll taxes take another 24 days of work. Sales and excise taxes require 15 days of work to pay off. Property taxes take 12 days and corporate income taxes nine days.

The Business Times has served as the definitive source for Grand Junction business news since 1994. The journal offers news, views and advice you can use twice each month in print with daily updates online at www.TheBusinessTimes.com
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