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 whenthe average American has earned enough in wages to pay off their tax bill tothe federal, state, and local government.
A would-be joyous occasion, if it didn’t take more than three months of work toaccomplish. 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 CareAct and the return of the death tax.
It’s depressing enough to think the average American has towork 101 days to earn enough to pay off their tax burden, but even that doesn’trepresent the true cost of government. The Tax Foundation, the groupresponsible for doing the calculations behind Tax Freedom Day, only includestaxes collected in their math, completely ignoring the total level ofgovernment spending. At some point those deficits must be paid back, either inreduced government services relative to what we pay or higher taxes.
When we look at government spending, rather than the taxburden, the date gets pushed back even further. We’re talking way back. If thegovernment were to collect enough taxes to pay for its reckless spending binge,Tax Freedom Day would not arrive until May 23, meaning the average Americanwould have to work an incredible 41 more days to pay off their total taxburden.
Unless something is done to get government’s spendingproblem under control, Tax Freedom Day will continue to fall later, and later,in the year. Medicare, Medicaid, Social Security, and other government spendingwill continue to shoot upwards, posing an ever-greater threat to taxpayers asdeficits become unsustainable.
Fortunately, House Republicans, led by Budget CommitteeChairman Paul Ryan, have a plan to solve these problems (Read what NTU had tosay about their plan, a “Path to Prosperity” HERE).While not perfect, the Republican’s budget proposal would put us on a pathtoward a more fiscally sustainable future without placing additional burdens ontaxpayers. Who knows, if we pass a “Path to Prosperity”, Tax Freedom Day mayactually come early enough in the year to be worth celebration. As of now, I’llsave the money I’d spend on a Hallmark card for my tax bill.