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Tax Freedom Day 2008 is today, April 23, three days earlier than 2007's Tax Freedom Day, which fell on April 26. This annual annoucement from the Tax Foundation tells how many days we have to work each year in order to pay our federal taxes.
Both the stimulus rebates and a projection of slow growth in 2008 are the principal reasons for the earlier celebration, according to the nonpartisan Tax Foundation.
Tax Freedom Day is calculated by dividing the official government tally of all taxes collected in each year by the official government tally of all income earned in each year. Governments - federal, state and local - took 29.6 percent of income in 1970, 30.4 percent of income in 1980, 33.6 percent in 2000, and so on. This percentage is the nation's total tax burden. The Foundation then uses the historical trend and the most recent economic data to make a projection of what the tax burden will be in the current year and converts that burden into a date - a percentage of the year - on which Americans will have earned enough income to pay their total tax bill for the year.
The new study, Tax Foundation Special Report No. 160, "America Celebrates Tax Freedom Day," by Tax Foundation senior economist Gerald Prante and Tax Foundation president Scott Hodge, also compares tax payments to other major consumer expenditures, traces the course of America's tax burden since 1900, examines the composition of today's tax burden by type of tax, and calculates a Tax Freedom Day for each state.
In 2008, Americans will work 74 days to afford their federal taxes and 39 more days to pay state and local taxes, the Tax Foundation reports. Meanwhile, buying food requires 35 days of work, clothing 13 days, and housing 60 days. Other major categories are health and medical care (50 days), transportation (29 days), and recreation (21 days).
You can read the Tax Freedom Day report including Tax Freedom Day by State on the Foundation's website.
| April 15 has come and gone, but that doesn't mean there aren't still plenty of questions about taxes. If you need to clarify a tax issue, please contact Tax Specialist Crystal Martin at 717-757-6999 or 800-745-8233. You can also send Crystal an email by using the form below. |
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Our firm provides the information in this e-newsletter for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles in this e-newsletter are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided "as is," with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.
IRS Circular 230 Notice: To ensure compliance with requirements imposed by the IRS, we inform you that any US tax advice contained in this communication is not intended or written to be used, and cannot be used, for the purpose of avoiding penalties under the Internal Revenue Code.
Securities and advisory services offered through Geneos Wealth Management, Inc. Member FINRA/SIPC. Geneos Wealth Management, Inc is not affiliated with Stambaugh Ness. |
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