US Tax Freedom Day on April 9

April 6, 2010 Taxation in USA

2007 California Corporate Tax, shows penaltyApril 9th, the 99th day of 2010, has been calculated as the date on which the US as a nation has earned enough income to finance its annual Government tax burden and start working for itself.

In its yearly calculation the Tax Foundation has announced that the 2010 Tax Freedom Day (TFD) will fall on April 9th. The date, which may change yearly, is calculated based on the latest US total national income figures and annual tax liabilities faced by taxpayers, and aims to illustrate the hypothetical point at which earners have collected enough income to satisfy their annual taxation obligations. According to the Tax Foundation the total average effective tax rate across all states in the US for the year 2010 is 26.90 percent. The TFD for the year 2010 fell one day later than in the year 2009, but more than two weeks earlier than in 2007.

The tax burden used for the TFD calculation is comprised of all individual income taxes, payroll taxes, corporate income taxes, property taxes, along with sales and excise taxes collected across the US. According to the Tax Foundation estimates, in 2010 for the average taxpayer income taxes will take 32 days to pay off; payroll taxes will take 25 days to pay off; sales and excise taxes will require additional 15 days; corporate taxes will take 8 days; and property taxes and miscellaneous charges are estimated to necessitate 12 and 6 days respectively.

Due to varying State Government tax levels, each US state has an individual TFD date. In 2010 the highest number of days required for taxpayers to pay off their tax liabilities was in Connecticut with 117 days, followed by New Jersey and New York with 115 and 113 days. Alaska and Louisiana will be the first states to work through their tax burden, spending only 85 calendar days to pay of their taxes.

Historically, the earliest TFD in the US was in January 19th 1909, when the average taxpayers required only 19 calendar days to pay of their taxes. The latest TFD was on May 1st 2000 when the number of days needed to pay all tax obligations for US taxpayers reached 121 days.

Photo by Casey Serin