Today, the Tax Foundation notes that Americans have worked enough to pay off their 2013 taxes, leaving the rest of the year’s earnings available for private consumption and investment:
Tax Freedom Day is the day when the nation as a whole has earned enough money to pay its total tax bill for the year. A vivid, calendar based illustration of the cost of government, Tax Freedom Day divides all federal, state, and local taxes by the nation’s income. In 2013, Americans will pay $2.76 trillion in federal taxes and $1.45 trillion in state taxes, for a total tax bill of $4.22 trillion, or 29.4 percent of income. April 18 is 29.4 percent, or 108 days, into the year.
Because of the increase in payroll taxes and income taxes on high income earners as part of the fiscal cliff deal, Tax Freedom day falls three days later this year than it did last year. While many limited government advocates will view this tax burden as too large, the Tax Foundation website points out that the $4.22 trillion we will pay in taxes this year will not cover the full cost of government spending. Including this year’s deficit spending, which is a tax on future earnings, would push Tax Freedom Day out to May 9th.