Do You Know Taxes Take 30% of Your Year?
If every penny earned since the beginning of the year went to pay federal, state, and local taxes, by April 21 Americans would have worked long enough to pay this year’s tax bills (April 20 for Oregon). Tax Freedom Day is a calendar-based illustration of the cost of government which divides all taxes by the nation’s income. By this calculation, Americans will work 111 days in 2014 and pay 30.2% of their earned income to all levels of government.
But this is only what Americans actually pay, not what government spends. According to the nonpartisan Tax Foundation: “Since 2002, federal expenses have exceeded federal revenues….If we include this annual federal borrowing, which represents future taxes owed, Tax Freedom Day would occur on May 6, 15 days later.” That’s an additional two weeks of federal government spending paid for by borrowing.
Americans pay more in taxes ($4.5 trillion) than they do on food, clothing, and housing combined. The saying goes, you should “work to live, not live to work.” But the more government grows, the more Americans are working less to live and more to pay for runaway government spending. That leaves fewer resources to invest in the real engines of economic growth: private sector businesses that create jobs and produce goods and services for a market fueled by Americans’ hard-earned purchasing power.
Kathryn Hickok is Publications Director and Director of the Children’s Scholarship Fund-Portland program at Cascade Policy Institute.