Happy Tax Freedom Day! Ok, maybe I shouldn’t have said “happy.” Today is a made-up holiday (expect a Hallmark card soon) marking the day when the average American has earned enough in wages to pay off their tax bill to the federal, state, and local government.
A would-be joyous occasion, if it didn’t take more than three months of work to accomplish. In fact, Tax Freedom Day is three days later than it was in 2012, in large part due to new taxes in the Patient Protection and Affordable Care Act and the return of the death tax.
It’s depressing enough to think the average American has to work 101 days to earn enough to pay off their tax burden, but even that doesn’t represent the true cost of government. The Tax Foundation, the group responsible for doing the calculations behind Tax Freedom Day, only includes taxes collected in their math, completely ignoring the total level of government spending. At some point those deficits must be paid back, either in reduced government services relative to what we pay or higher taxes.
When we look at government spending, rather than the tax burden, the date gets pushed back even further. We’re talking way back. If the government were to collect enough taxes to pay for its reckless spending binge, Tax Freedom Day would not arrive until May 23, meaning the average American would have to work an incredible 41 more days to pay off their total tax burden.
Unless something is done to get government’s spending problem under control, Tax Freedom Day will continue to fall later, and later, in the year. Medicare, Medicaid, Social Security, and other government spending will continue to shoot upwards, posing an ever-greater threat to taxpayers as deficits become unsustainable.
Fortunately, House Republicans, led by Budget Committee Chairman Paul Ryan, have a plan to solve these problems (Read what NTU had to say about their plan, a “Path to Prosperity” HERE). While not perfect, the Republican’s budget proposal would put us on a path toward a more fiscally sustainable future without placing additional burdens on taxpayers. Who knows, if we pass a “Path to Prosperity”, Tax Freedom Day may actually come early enough in the year to be worth celebration. As of now, I’ll save the money I’d spend on a Hallmark card for my tax bill.