What exactly is Tax freedom Day? It is the first day of the year in which the nation as a whole has theoretically earned enough income to fund its annual tax burden. Tax Freedom Day answers the basic question, “What price is the nation paying for government?” An official government figure for total tax collections is divided by the nation’s total income. The answer this year is that taxes will amount to 26.89% of our income. 26.89% of our income equates to the first 99 days of 2010 or April 9th.
Five major categories of tax dominate the tax burden. Individual income taxes, both federal and state, require 32 days’ work. Payroll taxes take another 25 days’ work. Sales and excise taxes, mostly state and local, take 15 days to pay off. Corporate income taxes take 8 days, and property taxes take 12. Americans will log 6 more days to pay other miscellaneous taxes, most notably including motor vehicle license taxes and severance taxes, and another day for estate taxes.
Each State has its own Tax Freedom day, April 10th is Colorado’s. Don’t you Coloradoan’s feel better knowing that in 10 days you are finally working to pay your bills?