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April 15th Has Passed, But We're Still Waiting for Tax Freedom Day

About the Author
Paul Guppy
Senior Researcher

Now that April 15th has come and gone people might think our tax woes are over for the year. Not so. A new report from the Washington, D.C.-based Tax Foundation shows that people in our state will work longer than residents of all other states but one to earn enough to pay their tax bill this year.

Each year the Tax Foundation identifies Tax Freedom Day, the day Americans will have earned enough money to pay for federal, state and local taxes. With all the complicated fees and taxes, many of them hidden, that we face every day, the ranking provides a clear and reliable way to assess the total tax take. It is calculated by dividing taxes imposed at all levels of government by per capita income, then counting the number of days starting January 1st it takes the average citizen to earn enough to pay taxes. This year Tax Freedom Day for the nation falls on April 27th, two days earlier than last year, largely due to President Bush's broad-based tax cut.

In Washington, though, we have the questionable distinction of having the second-latest Tax Freedom Day in the nation - just before Connecticut's - under this method of assessing tax costs (other rankings don't count federal taxes). Our Tax Freedom Day won't arrive until May 9th, twelve days after the rest of the country. The Tax Foundation reports that, "The average per capita tax burden [in Washington] will be $11,899. The average Washingtonian will have to devote all of the income earned during the first 129 days for the year to pay tax bills." After that people can stop working for the government and start working for themselves and their families.

It wasn't always this way. Historically, Americans have enjoyed a generally low tax burden, a policy that played a major role in spurring the rapid economic growth and expanded opportunities of our country's first century. From 1776 until the early 1900s federal, state and local governments combined usually took less than ten percent of the nation's peacetime income. The first income tax rate, for example, was one percent, and it was applied only to very high incomes.

With the advent of sweeping New Deal spending in the 1930s and the broad expansion of costly government programs under Lyndon Johnson's Great Society, the tax burden on Americans grew accordingly. State and local governments kept pace, quickly matching higher federal spending with new programs of their own.

While all would agree that government today provides many good and necessary things, the sheer number of public programs, each with its own staff and administrative expenses, has grown to staggering proportions. Washington's state government, for example, has added more than 10,000 new positions to it's payroll in the last five years. The cumulative effect of yearly spending increases is enormous, and now imposes an unprecedented claim on family incomes. This year Americans will pay more for taxes than they will for food, clothing and shelter combined.

Some elected officials want still more. When seeking to push the tax burden higher, as Seattle's mayor proposed just this month, they often say the added money they want equals "only a couple of lattes a month" for the average family. They seem to forget that most families are already paying for the equivalent of several hundred lattes a month already. Any new levies must be added to an already-high tax burden, which means an automatic pay cut to working families

Yet proposals for any reduction in reduce taxes meet stiff resistance. Already some members of Congress want to cancel the Bush tax cut in future years. There is a simple answer to those who want to eliminate tax cuts. Since tax increases are mandatory, while tax cuts are voluntary, citizens who believe their taxes should not be reduced can continue to send in the higher amount. You can be sure the government will accept it. This is an ideal solution for any citizens who may feel they are undertaxed. They can simply contribute the amount of their income they feel the government should have, without imposing a higher burden on their neighbors.

Today government and its cost seem to overshadow almost every aspect of society. Even more than April 15th, Tax Freedom Day provides us with an important gauge of the impact of government in our lives.

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