While most taxpayers soon will complete their tax returns or file for an extension for 2014, they’ll have to keep working a bit longer to earn enough money to pay their taxes for 2015.
Nationwide, taxpayers will have to work until April 24 to earn enough money to pay their taxes. In Colorado, it will take one more day.
The Tax Foundation — a nonprofit group in Washington, D.C., that monitors government fiscal policy — calculates what it calls Tax Freedom Day. That’s the day when taxpayers collectively have earned enough money to pay their federal, state and local taxes for the year.
“Tax Freedom Day gives us a vivid representation of how much we pay for the goods and services provided by governments at all levels,” said Kyle Pomerleau, an economist with the Tax Foundation. “Arguments can be made for if and why the tax bill is too high or too low. But in order to have an honest discussion, it’s important for taxpayers to understand the cost of government. Tax Freedom Day helps people relate to that cost.”
For 2015, Americans will pay a total of $4.8 trillion in taxes, about 31 percent of all income earned in the country. That’s more than Americans will pay in the year for housing, food and clothing combined.
For 2015, Americans will have to work 114 days into the year to earn enough money to pay taxes. That’s one day longer than last year because of economic growth. Higher wages and corporate profits are expected to result in higher individual, payroll and corporate taxes.
Calculated by time, Americans will have to work 43 days to earn enough money to pay federal, state and local taxes; 26 days to pay payroll taxes; 12 days to pay corporate income taxes; 11 days to pay property taxes and the remaining seven days to pay various other taxes.
Tax Freedom Day varies by state because of different tax policies as well as a progressive federal income tax system that imposes higher tax rates on higher incomes. Tax Freedom Day comes later in states with higher taxes and residents with higher incomes.
With a Tax Freedom Day of April 25, Colorado will be the 38th state to reach the milestone in 2015.
Tax Freedom arrives the earliest at April 2 in Louisiana and doesn’t come until May 13 in Connecticut and New Jersey.