Finance Globe

U.S. financial and economic topics from several finance writers.
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Tax Freedom Day is April 12th for 2011

Have you ever though about exactly how many days out of the year you have to work in order to pay your tax bill? Well, the Tax Foundation in Washington figures that for this tax year, you’ll work over a hundred days to pay your taxes - about 28% of your income. Using government figures on income and taxes, the organization calculated that if the average taxpayer were to begin the year working and all income goes strictly to paying off federal, state, and local taxes, they would have worked off their tax bill by April 12th in 2011 - on the 102nd day of the year.

“Tax Freedom Day” arrives three days later than it did last year, mostly due to taxpayers’ increased income and less because of changes in the tax law, according to Kail Padgitt, Ph.D, Tax Foundation’s Staff Economist.

"As the economic recovery continues, individuals' rising income pushes them into higher tax brackets. Also, corporate tax revenue has also seen a resurgence," said Padgitt.

But some tax changes are also part of the reason the average American is working longer to pay their tax bills - specifically, the federal estate tax and taxes associated with the Patient Protection and Affordable Care Act.

And while this year’s date of April 12th is a national average, residents of Connecticut actually have the longest - until May 2nd - to have theoretically worked off their tax bill. New Jersey and New York have until the end of April. Taxpayers in states with more modest average incomes have already reached their Tax Freedom Day for this year - the earliest was on March 26th in Mississippi, closely followed by Tennessee, South Carolina, and West Virginia.

The latest ever national Tax Freedom Day was on May 1, 2000. This was a result of the tech bubble that pushed up employment and wages, and caused capital gains to go sky-high, combined with higher tax rates enacted in 1993.


Source:
The Tax Foundation
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Friday, 23 August 2019

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