Tax Freedom Day
Posted by Richard on April 30, 2007
Happy Tax Freedom Day! If you have an average income and live in an average state, today is the day you start working for yourself instead of the government. All the income you earned from January 1 until now went to pay your share of total tax collections:
"Tax freedom will come two days later in 2007 than it did in 2006," said Tax Foundation President Scott A. Hodge, "and fully 12 days later than in 2003, when tax cuts caused Tax Freedom Day to arrive comparatively early, on April 18."
However, 2007's Tax Freedom Day is still slightly [e]arlier than it was in 2000, when the economic boom, the tech bubble and higher tax rates pushed tax burdens to a record high, and Tax Freedom Day was postponed until May 5.
Of course, Tax Freedom Day is based on averages:
Tax Freedom Day answers the basic question, "What price is the nation paying for government?" We divide the most authoritative figure for total tax collections by the most authoritative figure for the nation's income. The answer this year is that taxes will amount to 32.7 percent of our income. We convert that percentage into days worked, and if we started on January 1, it would take until April 30. That's when we could start keeping some of our earnings. Income and tax data are then parsed out to the states, yielding 50 state-specific Tax Freedom Days.
The state Tax Freedom Days range from Oklahoma's April 12 to Connecticut's May 20. Colorado's was April 28. Tennessee did significantly better with April 15.
These minor state-by-state variations, however, are dwarfed by the greater variability based on your income. Contrary to the class-warfare rhetoric of John Edwards and other socialists masquerading as Democrats, the rich are already getting soaked. Heck, the moderately well-off are getting soaked. According to the National Taxpayers Union, the top 10% of income earners paid over two-thirds of all federal personal income taxes in 2004, while the bottom half paid barely over 3%. Here are the numbers:
For Tax Year 2004
|
Percentiles Ranked by AGI |
AGI Threshold on Percentiles |
Percentage of Federal Personal Income Tax Paid |
|
Top 1% |
$328,049 |
36.89 |
|
Top 5% |
$137,056 |
57.13 |
|
Top 10% |
$99,112 |
68.19 |
|
Top 25% |
$60,041 |
84.86 |
|
Top 50% |
$30,122 |
96.70 |
|
Bottom 50% |
<$30,122 |
3.30 |
|
Note: AGI is Adjusted Gross Income |
||
So if you're making $60k or better — not exactly rolling in dough — you're going to be working for the government for a while longer. And if you're at $100k — well off, but not quite filthy rich — well, you'd better keep that nose to the grindstone, because Congress has lots more earmarks to pay for.
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