Tax Freedom Day 2015

April 15 is just around the corner and many of us procrastinators are still struggling with our 1040’s, attempting to complete the onerous forms before the deadline arrives. Will we owe? Or will we hit the jackpot and get a refund this year? How much of that tax we owe can we trace back to the fun we had playing the slots and table games at our favorite casinos? I hope we all won big and can blame a lot of our tax tribulations on lucky spins on our favorite games!

There’s another special day in April connected to taxes: April 24 - Tax Freedom Day this year.

No, that’s not a day we celebrate because we’ll be free of having to pay taxes on April 24. (Wishful thinking!) It’s the day when we as a nation will have earned enough to pay our total tax bill for the year. Tax Freedom Day takes all taxes - federal, state, local - and divides them by the nation’s income. In 2015, according the web site taxfoundation.org, Americans will pay $3.28 trillion in federal taxes and $1.57 trillion in state and local taxes, for a total tax bill of $4.85 trillion. That’s 31% of all national income. This year Tax Freedom Day falls on April 24, 114 days into the year. It’s one day later than last year due to the expected tax revenue boost from corporate, payroll, and individual income taxes. 

This year Americans will work longer than ever before to pay all of these taxes - 43 days. Payroll taxes will take 26 days to pay. Sales and excise taxes - 15 days. Corporate income taxes - 12 days, and property taxes - 11 days. The remaining 7 days are spent paying estate and inheritance taxes, customs duties, and other levies.

Since 2002, federal expenses have surpassed federal revenue. In 2015 the deficit will decline to $580 billion. (We hope.) At least that’s what this site says. If this annual federal borrowing is included - which represents future taxes owed - Tax Freedom Day would occur on May 8, 14 days later according to the site.

There’s a map  of the United States included on the taxfoundation.org site that gives the State Tax Freedom Day dates for residents of each state in the nation. You might find it interesting. I did. 

I live in California - and we pay A LOT in taxes here. The site says we are the 4th highest in the nation. Tax Freedom Day for those of us who live in the Golden State is not until May 3. In Indiana where I spent most of my life, taxes are the 10th lowest, and Tax Freedom Day is earlier, April 18. Connecticut and New Jersey have to work the longest, till May 13. Louisiana’s tax freedom day has already passed, April 2.

Thanks to taxfoundation.org and economist Kyle Pomerleau for the depressing statistics in this timely posting.