Tax Freedom Day
Tax Freedom Day... sounds like you should not be paying taxes. On the contrary, Tax Freedom Day represents how many days the average American needs to work in order to pay their taxes.
This year's Tax Freedom Day falls on April 30, which means Americans on average will work for 120 days in order to pay their taxes.
How It Works...
Of the 120 days needed to earn your tax liability, 79 days of work are needed to pay federal taxes, and an additional 41 days is needed to pay for state and local taxes. The number of taxes worked to pay for taxes compared to other expenses is fairly high.
Americans will work for 105 days to afford food, clothing, and housing expenses. Additionally, housing and household operations comprises 62 days of work, health and medical care comprises 52 days, food and travel expenses each comprise 30 days, and finally recreation comprises 22 days. So next time you sit and wonder where you're money has gone, think about the previous categories.
When Is Tax Freedom Day?
Tax Freedom days differ by state. The top 3 states with the highest tax burden are Connecticut, New York, and New Jersey. The top 3 states with the lowest tax burden are Mississippi, Alabama, and Oklahoma.
Therefore, by looking at the states with the highest and lowest tax burdens, it appears citizens living in states in the northeast suffer the largest tax burden, while citizens living in the south have the lowest tax burden.
View every state's Tax Freedom Day and rank from 1970 to the present (.xls).
So remember, if your tax freedom day has passed, then all the income you earn from now own can be yours!!
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