TaxProf Blog

Editor: Paul L. Caron
Pepperdine University School of Law

A Member of the Law Professor Blogs Network

Thursday, April 18, 2013

Today Is Tax Freedom Day -- Earlier in MS, LA & TN, Later in CT, NY & NJ

Tax Foundation logoToday is Tax Freedom Day, the day on which Americans will have earned enough money to pay all federal, state, and local taxes for the year:

Tax Freedom Day is the day when the nation as a whole has earned enough money to pay its total tax bill for the year. A vivid, calendar based illustration of the cost of government, Tax Freedom Day divides all federal, state, and local taxes by the nation’s income. In 2013, Americans will pay $2.76 trillion in federal taxes and $1.45 trillion in state taxes, for a total tax bill of $4.22 trillion, or 29.4 percent of income. April 18 is 29.4 percent, or 108 days, into the year.

Tax Freedom Day is five days later than last year, due mainly to the fiscal cliff deal that raised federal taxes on individual income and payroll. Additionally, the Affordable Care Act’s investment tax and excise tax went into effect. Finally, despite these tax increases, the economy is expected to continue its slow recovery, boosting profits, incomes, and tax revenues. ...

The total tax burden borne by residents of different states varies considerably, due to differing state tax policies and because of the steep progressivity of the federal tax system. This means higher income states celebrate Tax Freedom Day later: Connecticut (May 13), New York (May 6), and New Jersey (May 4). Residents of Mississippi will bear the lowest average tax burden in 2013, with Tax Freedom Day arriving for them on March 29. Also early are Louisiana (March 29) and Tennessee (April 2).

 

Rank

 

State

Days Worked

to Pay Taxes

Tax Freedom Day

1

Connecticut

133

May 13

2

New York

126

May 6

3

New Jersey

124

May 4

4

Illinois

115

April 25

4

Massachusetts

115

April 25

6

California

114

April 24

7

Minnesota

113

April 23

8

Maryland

111

April 21

9

Washington

110

April 20

9

Wisconsin

110

April 20

Average

United States

108

April 18

40

Alaska

96

April 6

40

Kentucky

96

April 6

40

Oklahoma

96

April 6

43

Alabama

95

April 5

43

Arizona

95

April 5

45

South Dakota

94

April 4

46

New Mexico

93

April 3

46

South Carolina

93

April 3

48

Tennessee

92

April 2

49

Louisiana

88

March 29

49

Mississippi

88

March 29

Tax Foundation 2

The Center on Budget and Policy Priorities criticizes the Tax Foundation's methodology here.

http://taxprof.typepad.com/taxprof_blog/2013/04/today-is-tax-freedom-day.html

Tax, Think Tank Reports | Permalink

TrackBack URL for this entry:

http://www.typepad.com/services/trackback/6a00d8341c4eab53ef017d427b844c970c

Listed below are links to weblogs that reference Today Is Tax Freedom Day -- Earlier in MS, LA & TN, Later in CT, NY & NJ:

Comments

Frightening chart. As a resident of the Great State of NJ, it's wonderful to contemplate that I am contributing so much to the great services govm't provides. The feds research snail sex. My current town just got its students out of trailers after 22 years. NJ mismanaged or lost $3 billion in school reconstruction - the kids are inside only because they rented buildings from a closed parochial school.

I will leave NJ when I retire in a few years - probably DE - and cut my property, sales & income taxes by north of $4k per MONTH and move to a cheaper housing market. Every day I receive incentives to vote with my feet.

Posted by: air65cav | Apr 18, 2013 9:35:39 AM

From the CBPP's slanted but mostly factually correct analysis:
"When the federal government runs a deficit in a given year, the obligation to pay off the debt incurred in that year is spread out over many future years — years in which the total income of the nation will surely be higher than today. By adding the amount of the deficit to current taxes and measuring them relative to current incomes, the Tax Foundation seriously overstates the actual tax level today."

Treasury debt incurs interest expense. The interest expense offsets the higher incomes.

Is it conceivable that the author of this article simply overlooked the fact that Treasury debt incurs interest expense? Or did the author believe that readers would be too stupid to notice the intentional omission? Carelessness, incompetence, or dishonesty? You decide.

Posted by: AMTbuff | Apr 18, 2013 1:56:09 PM

Very telling table. The bottom half of states that give "Freedom" sooner are the US equivalent of Third World Countries and have the worst education systems. NJ might be expensive, but I would bet that the worst NJ school districts (with the exception of Camden and Newark) are on par with the best school districts from the bottom of that list like TX and MS.

Posted by: Justin the Lawyer | Apr 18, 2013 7:42:02 PM

Justin the Lawyer - I see you "guess" with your personal prejudices/politics. I live in NJ - thee are many poor public schools. I, however, do not know how they compare to TX and MS.

Here's what I do know - when looking at WI, their black and hispnic students do not do as well as those in TX. Explain that one.

Posted by: air65cav | Apr 19, 2013 8:35:32 AM

Oh and Justin - the US spends more per pupil than any other country - and our students do less well than many country/cultures that spend far less per pupil. Expalin that one. Do you really believe that NY, NJ, CT and CA have better services and roads that other states?

Posted by: air65cav | Apr 19, 2013 8:37:54 AM