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Let tax freedom ring

Let freedom ring. Tax freedom, that is.

The day when average Colorado residents will have earned enough money to pay their federal, state and local taxes will arrive on April 22. That’s a day after U.S. citizens will have stopped working for Uncle Sam and finally can start working for themselves.

There’s no shortage of irony in the fact Tax Freedom Day comes a week after the deadline to file federal and state income tax returns.

The Tax Foundation — a nonprofit group in Washington, D.C., that monitors government fiscal policy — determines Tax Freedom Day. The calculation is a straightforward one in dividing combined federal, state and local taxes by collective income and then multiplying the resulting ratio by the number of days in a year.

For 2014, Americans will pay a total of $4.5 trillion in federal and state taxes, or about 30.2 percent of their incomes. That means they must work 111 days into the year to earn sufficient income to pay those taxes. The total includes 33 days of work to pay federal income taxes, 27 days of work to pay social insurance taxes, 13 days to pay state and local excise taxes, 11 days to pay property taxes and nine days to pay state and local income taxes.

By the way, Americans will work longer to earn sufficient wages to pay taxes than they’ll work to earn enough money to pay for housing, food and clothing combined.

Tax Freedom Day varies by state along with their tax rates and other policies as well as differing income levels. Tax Freedom Day arrived earliest on March 30 in Louisiana, but won’t be celebrated until May 9 in Connecticut and New Jersey. In Colorado, residents will work 112 days to earn enough money to pay their taxes, a period that ranks the 13th longest among the 50 states.

While it might be meager consolation for the realization you’ll work nearly four months just to earn enough money to pay taxes, consider that Tax Freedom Day falls later this year because economic recovery has bolstered earnings and, of course, taxes.


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Posted by on Apr 9 2014. Filed under Editorials, Opinion. You can follow any responses to this entry through the RSS 2.0. Both comments and pings are currently closed.

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