US Tax Freedom Day on April 17th

April 5, 2012 Taxation in USA

IncometaxSignWASHINGTON D.C. – The Tax Freedom Day® in the US in 2012 will fall on April 17th, although this point would come nearly one month later if the national budget deficit was taken into account.

The US based non-government institute the Tax Foundation has completed and published the results of its annual calculation of the date of Tax Freedom Day® in the US for 2012, unveiling that US taxpayers will need to work for a total of 107 days in 2012 before they can pay off their tax obligations in full.

Last year, the Tax Freedom Day® was calculated to fall on April 11th, an approximate 5 days earlier than in 2012. The Tax Foundation explained the change, saying that since the 2011 calculation were completed, the collection of tax revenues has risen faster than the incomes of US taxpayers.

According to the Tax Foundation, the average taxpayer will spend 32 days of the year to earn enough to cover their individual income tax liabilities to the US federal government, and another 8 days for all state and local income taxes. Just over 23 days will be spent to cover all social insurance payments. Sales taxes will require an additional 14 days, and property taxes will necessitate working a further 12 days. The proportional part of the payment of corporate income taxes combined with all other federal and state taxes will take an even further 17 days.

The Tax Foundation’s study indicated that if the calculation took into account the government’s budget deficit, the Tax Freedom Day® would move 27 days further into the year.

Tax Freedom Day® is a theoretical measure of how long an average taxpayer would need to work before being able to pay off their entire tax obligations for one calendar year. The measure is used to compare tax burdens in relation to incomes between countries, or to gauge the relative tax burden faced by taxpayers from one year to the next. The Tax Freedom Day® was first calculated by in 1948 by a US businessman who trademarked the term. In 1971 the trademark was transferred to the Tax Foundation, which has calculated the Tax Freedom Day® date every year since.

Photo by Talk Radio News Service