In its March 2015 report, the Tax Foundation (the Foundation, a tax policy research group) determined that Tax Freedom Day falls on April 24th, the 114th day of 2015. That is the day when the nation as a whole has earned enough to pay its total tax bill for the year. Stated another way, for the remaining 251 days of this year, we are free of taxes. Tax Freedom Day divides all federal, state, and local taxes by the nation’s income.
Key Report Findings
- In 2015, American taxpayers will be liable for $3.3 trillion in federal taxes and $1.5 trillion in state and local taxes, for a total of $4.8 trillion, or 31 percent of the nation’s income.
- Tax Freedom Day occurs one day later than in 2014 due mainly to the country’s continued steady economic growth, which is expected to boost tax revenue.
- Americans will spend more on taxes in 2015 than on food, clothing, and housing combined.
- When factoring in federal borrowing (represents future taxes owed), deficit-inclusive Tax Freedom Day occurs 14 days later on May 8.
- The significance of this date is that it represents how long Americans as a whole have to work in order to pay the nation’s tax burden.
What Taxes Do We Pay?
The Foundation breaks down the 114 day period as follows:
- 43 days to earn enough to pay federal, state, and local individual income taxes.
- 26 days to pay payroll taxes (Social Security and Medicare)
- 15 days to cover sales and excise taxes
- 12 days for corporate income taxes
- 11 days for property taxes
- 7 days to pay estate and inheritance taxes, customs duties, and other taxes.
When Is Your State’s Tax Freedom Day?
Of course, taxpayers in higher-income and higher-tax states celebrate Tax Freedom Day later. For those with little or no state taxes, the day arrives earlier. The following is a cross section of states based on Foundation calculations:
- California – May 3 (#47)
- Connecticut – May 13 (#50)
- Florida – April 20 (#30)
- Georgia – April 15 (#15)
- Illinois – April 30 (#43)
- New Jersey – May 13 (#49)
- New York – May 8 (#48)
- Louisiana has the lowest average tax burden in 2015, with Tax Freedom Day arriving for them on April 2
It comes as no surprise that the New York metropolitan area boasts the three last ranked states in New York (#48), New Jersey (#49) and Connecticut (#50).
How Does Tax Freedom Day 2015 Compare to Other Years?
According to Tax Foundation records, the latest Tax Freedom Day occurred on May 1, 2000, a year in which Americans paid 33 percent of their total income in taxes. The earliest took place on January 22, 1900, meaning that the nation paid only 5.9 percent of its income in taxes. The last time Tax Freedom Day was this late in the year was April 25, 2007.
If you have any questions, please contact Victor C. Belgiorno at 516-861-3704 or or Bob Jahelka at 516-861-3707 or .