Depending on your outlook, Tax Freedom Day is cause for either celebration or consternation.
Tax Freedom Day, as calculated by the Tax Foundation, is the day of the year when Americans have earned enough money to pay the nation’s yearly tax bill.
This year, the national red letter day — or black letter day, if you prefer — is April 17. This year, Missouri residents celebrated our state’s version of Tax Freedom Day on Saturday.
Nationally, 107 days of 2012 will have passed before Americans earn enough to pay this year’s combined 29.2 percent federal, state and local tax bill.
The percentage translates into $2.62 trillion in federal taxes and $1.42 trillion in state and local taxes.
In comparison to last year, Tax Freedom Day will arrive four days later as a result of increased federal income and corporate tax collections.
But this year’s date is hardly the latest ever. In 2000, Tax Freedom Day occurred on May 1, which reflects a tax bill of 33 percent of Americans’ total income.
The Tax Foundation reports the idea of Tax Freedom Day was conceived in 1948 by a Florida businessman, Dallas Hostetler, as a calendar-based illustration of the cost of government. When he retired in 1971, he deeded the concept to the Tax Foundation.
Regarding its calculations, the Tax Foundation explains: “We assume that the nation starts working on January 1, earning the same amount each day and spending nothing. When the nation has finally earned enough to pay all the taxes that will be due for that year, Tax Freedom Day has arrived.”
The day approaches when we — collectively — will have earned enough to fulfill our tax obligations.
On April 17, we will be free, theoretically, to enjoy the fruits of our labors. Perhaps we should start a shopping list.
Copyright Jefferson City News Tribune. Reprinted with permission.