Coloradans worked eight fewer days this year to collectively earn enough money to pay their taxes, according to the latest results of an annual analysis of income and tax statistics.
Nationwide, taxpayers worked four days less in 2018 than they did in 2017.
Tax Freedom Day arrived April 16 in Colorado and April 19 nationwide. That’s the day the average taxpayer earned sufficient income to pay local, state and national taxes for this year.
Federal tax reforms lowered individual and corporate income taxes. Still Americans will pay a total of $5.2 billion in federal, state and local taxes in 2018 — 30 percent of their income and more than they’ll spend on food, clothing and housing combined.
The Tax Foundation — a nonprofit group in Washington, D.C., that monitors government fiscal policy — calculates Tax Freedom Day by dividing federal, state and local tax collections by income. That ratio then is multiplied by 365 days to determine the number of days required to earn enough money to pay taxes. The calculation assumes taxpayers work every day, including weekends, and spend nothing during that period.
For 2018, Coloradans worked 106 days to earn sufficient income to pay their taxes. That ranked 27th among the states in terms of the most days spent working to pay taxes.
Alaska and Louisiana celebrated the earliest Tax Freedom Day on April 4. Alabama, Oklahoma and Tennessee marked Tax Freedom Day on April 5.
Connecticut and New Jersey as well as Washington, D.C., won’t observe Tax Freedom Day until May 3. Tax Freedom comes last on May 14 in New York. Tax Freedom Day comes latest in states with the highest taxes, but also highest income levels.
Nationwide, the earliest Tax Freedom Day came on Jan. 22 in 1900, when Americans collectively paid 5.9 percent of their income in taxes. The latest Tax Freedom Day arrived on May 1 in 2000, when Americans paid an accumulative
33 percent of their income in taxes.
If federal borrowing and what’s expected to be an $806 billion deficit for 2018 were included in the latest calculation, Tax Freedom Day would be delayed 17 days until May 6.
For 2018, American taxpayers had to work a total of 44 days to earn enough money to pay federal, state and local income taxes. They worked another 26 days to pay payroll taxes, 15 days to pay sales and excise taxes, 11 days to pay property taxes and seven days to cover corporate income taxes. The worked yet another six days to pay for estate and inheritance taxes, customs duties and other taxes.