Tax Freedom Day falls on April 19th
April 15,2018
the staff of the Ridgewood blog
Ridgewood NJ, according to the Tax Foundation ,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. In 2018, Tax Freedom Day falls on April 19th, 109 days into the year, three days earlier than last year. Tax Freedom Day is significant because Americans will collectively spend more on taxes in 2018 than they will on food, clothing, and housing combined. If you include annual federal borrowing, which represents future taxes owed, Tax Freedom Day would occur 17 days later, on May 6th.
This year Tax Freedom Day will be three days earlier than it was in 2017, in large part due to the recent federal tax law, the Tax Cuts and Jobs Act, which significantly lowered federal individual and corporate income taxes.
The Tax Foundation defines Tax Freedom Day® as the day when the nation as a whole has earned enough money to pay its total tax bill for the year. Tax Freedom Day takes all federal, state, and local taxes and divides them by the nation’s income. In 2018, Americans will pay $3.39 trillion in federal taxes and $1.80 trillion in state and local taxes, for a total tax bill of $5.19 trillion, or 30 percent of national income. This year, Tax Freedom Day falls on April 19th, 109 days into 2018.
This year, Americans again will work the longest to pay federal, state, and local individual income taxes (44 days). Payroll taxes will take 26 days to pay, followed by sales and excise taxes (15 days), corporate income taxes (seven days), and property taxes (11 days). The remaining six days are spent paying estate and inheritance taxes, customs duties, and other taxes.
The total tax burden borne by residents of different states varies considerably due to differing state tax policies and the progressivity of the federal tax system. This means that states with higher incomes and higher taxes celebrate Tax Freedom Day later: New York (May 14), New Jersey (May 3), and Connecticut (May 3). Residents of Louisiana and Alaska bear the lowest average tax burden in 2018, with Tax Freedom Day having arrived on April 4. Also early were Tennessee, Oklahoma, and Alabama, all on April 5.
