Today is the deadline to submit your taxes to Uncle Sam and figure out whether he owes you or you still owe him more. Regardless of whether you have a refund or a bill, collectively, we all still have more working to do before we’re free from our tax burden for the year.
Tax Freedom Day marks the day that Americans are collectively done with working to pay for the nation’s tax obligations meaning the U.S. has earned enough to pay its taxes. For 2016, it isn’t until May 24 according to the Tax Foundation’s annual calculation, a day shorter than last year.
We have, in essence, given 114 days of work or the first quarter of the year plus to paying off public goods and services that many of us never benefit from. We are spending more money on taxes rather than using that cash for savings, spending on home purchases or college savings, or taking family vacations.
Out of 116 days, 46 days went toward paying federal, state, and local individual income taxes; 26 days for payroll taxes; 15 days for sales taxes; 11 days for property taxes; 9 days for corporate income taxes; and 7 days for estate taxes, custom duties and other taxes.
Americans will pay nearly $5 trillion in taxes: $3.3 trillion in federal taxes and $1.6 trillion in state and local taxes. We’ll spend more on taxes this year than on food, clothing and housing combined!
What could we do with even $1 trillion? Here's an idea: Put a dent in our national debt. Why not give out micro loans and small business loans with low interest rates? Or just give that money back to taxpayers and let us stimulate the economy through our purchases, savings. and investments. With $5 trillion we could stimulate the economy.
Experts explain what Tax Freedom Day represents in USA Today:
“Tax Freedom Day gives us a vivid representation of how much federal, state and local tax revenue is collected each year to pay for government goods and services,” Scott Greenberg, Tax Foundation analyst, said in a statement. “Arguments can be made that the tax bill is too high or too low, but in order to have an honest discussion, it’s important for taxpayers to understand the cost of government."
Over time, Tax Freedom Day has moved further back in the year, meaning that taxes take up a larger chunk of the nation’s income and hold back the economy, said Mike Patton, a financial planner, estate planner, tax specialist and mutual fund counselor who contributes to Forbes. With more money going to taxes, there is less capital around for investment in the private sector, Patton writes.
We also learn that Americans in individual states – due to the state tax rates – were set free or will be set free from their tax burdens at different times. Mississippi for example, was done working for Uncle Sam back on April 5th while Connecticut residents have to suffer until May 21st (nearly half the year) to complete their indentured service.
Forget government working for the people, we are working for government.