Posted on

America Now Spend more on taxes in 2016 than on food, clothing, and housing combined


Tax Freedom Day 2016 Arrives on April 24

April 6,2016

the staff of the Ridgewood blog

Ridgewood NJ, Tax Freedom Day, the day when the nation as a whole has earned enough to pay the federal, state, and local tax bill for year, will arrive 114 days into the year on April 24, according to the annual report released this morning by the nonpartisan Tax Foundation.

“Tax Freedom Day gives us a vivid representation of how much federal, state, and local tax revenue is collected each year to pay for government goods and services,” said Tax Foundation Analyst Scott Greenberg. “Arguments can be made that the tax bill is too high or too low, but in order to have an honest discussion, it’s important for taxpayers to understand the cost of government. Tax Freedom Day helps people relate to that cost.”

While the national date arrives nine days after the tax filing deadline, each state’s total federal, state, and local tax burden varies greatly. Tax Freedom Day arrives earliest in Mississippi (April 5), Tennessee (April 6), and Louisiana (April 7). On May 21, Connecticut will be the last state to reach Tax Freedom Day this year, while New Jersey (May 12) and New York (May 11) trail closely behind.

The report’s other key findings include:

This year, the national Tax Freedom Day falls on April 24, or 114 days into the year.
Collectively, Americans will spend more on taxes in 2016 than they will on food, clothing, and housing combined.
Americans will pay $3.3 trillion in federal taxes and $1.6 trillion in state and local taxes, for a total bill of almost $5.0 trillion, or 31 percent of the nation’s income.
Tax Freedom Day is one day earlier than last year, due mainly to the Protecting America from Tax Hikes Act of 2015, which made several business and individual tax cuts permanent.
If you include annual federal borrowing, which represents future taxes owed, Tax Freedom Day would occur 16 days later on May 10.

Historically, the date for Tax Freedom Day has fluctuated significantly. The latest-ever Tax Freedom Day was May 1, 2000 – meaning that Americans paid 33 percent of their collective incomes toward taxes. A century earlier, in 1900, only 5.9 percent of national income was required to pay the tax bill, and Tax Freedom Day fell January 22.