Cumberland Times-News

Editorials

April 28, 2014

Paid in full

Tax Freedom Day marks end of annual obligation to governments

Guess what day it is? Guess what day it is?



No, it’s not the hump day of the Geico camel commercial. It’s Tax Freedom Day in Maryland — the day when Marylanders collectively have earned enough income this year to pay off their total federal, state and local tax bills.



The nonpartisan Tax Foundation keeps track of the tax burden for residents of every state and issues an
annual report. Nationwide, Tax Freedom Day this year was April 21, three days later than last year. Maryland’s freedom day of April 28 means it is the 43rd state to reach Tax Freedom Day.



West Virginia’s freedom day was April 10 and Pennsylvania’s was April 21.



Tax Freedom Day divides all federal, state and local taxes by the nation’s income. In 2014, Americans will pay $3.0 trillion in federal taxes and $1.5 trillion in state taxes, for a total tax bill of $4.5 trillion, or 30.2 percent of income.



Historically, the date for Tax Freedom Day has fluctuated significantly. The latest-ever nationwide Tax Freedom Day was May 1, 2000 — meaning that Americans paid 33 percent of their total income in taxes. A century earlier, in 1900, Americans paid only 5.9 percent of their income in taxes, meaning Tax Freedom Day came on Jan. 22.



Among findings in the foundation’s annual report are:



• The national Tax Freedom Day is three days later than last year due mainly to the continuing economic recovery, which will boost federal tax revenue collected through the corporate, payroll and individual income tax.



• Americans will spend more on taxes in 2014 than they will on food, clothing and housing combined.



• Americans will spend 42 days working to pay off income taxes, 15 days for excise taxes, and 11 days for property taxes.



• Americans will pay $3 trillion in federal taxes and $1.5 trillion in state and local taxes, for a total bill of more than $4.5 trillion, or 30.2 percent of the nation’s income.



• If you include annual federal borrowing, which represents future taxes owed, Tax Freedom Day would occur on May 6, 15 days later.



Tax Freedom Day gets later every year. That’s a situation that will remain unchanged unless the tax and spend mentality of government changes.

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