Tax Freedom Day Arrived Early This Year
Tax Freedom Day, the day on which Americans start working for themselves instead of the various government entities, fell comparatively early this year, on April 19. On average, if you were to turn all of your earnings over to the federal, state, and local government until your tax obligations were met, it would have taken you the first 109 days of 2003 to stop paying taxes.
The not-for-profit Tax Foundation calculates Tax Freedom Day each year. Tax Freedom Day peaked in the 1990s, reaching an all-time late date of April 30 in 2000, a leap year. This year's April 19 date matches last year's date. The last time Tax Freedom Day fell this early was 1992. The day fell in mid-April from 1968 and throughout the '70s and '80s; it fell in early April in the '50s and '60s.
The Tax Foundation attributes this year's earlier date to federal tax reductions in recent years from the Economic Growth and Tax Reform Reconciliation Act in 2001 and the Job Creation and Worker Assistance Act in 2002, and to the sluggish economy. In light of the tax cut legislation that was just passed last week, the Tax Foundation projects that Tax Freedom Day will drop to April 18 next year, then down to April 16 (the lowest since 1985), then slowly climb as high as April 23 by 2013. That projection compares to an estimate of May 1 as Tax Freedom Day 2013 had the tax act not been enacted.
The breakdown of taxation for the 109 tax days of 2003 is as follows:
42 days: Individual income taxes
30 days: Social insurance taxes
17 days: Sales and excise taxes
11 days: Property taxes
9 days: Corporate income taxes
You can read the Tax Foundation's complete report on Tax Freedom Day.