If you live in Alabama, Alaska, Kentucky, Louisiana, Mississippi, Montana, New Mexico, North Dakota, South Dakota, or West Virginia, you work fewer days for government this year than 80 percent of all taxpayers.
In fact, as you read this, you are …
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If you live in Alabama, Alaska, Kentucky, Louisiana, Mississippi, Montana, New Mexico, North Dakota, South Dakota, or West Virginia, you work fewer days for government this year than 80 percent of all taxpayers.
In fact, as you read this, you are now working for yourself because you have achieved Tax Freedom Day. That’s the day when each of us has earned enough income to pay our tax liability to government at all levels.
Obviously, tax “liberation” varies for each of us given the state variables involved. That’s why the good work with data collection, aggregation and analysis by the Tax Foundation in Washington, D.C., deserves commendation for the insight and opportunity they provide to taxpayers to be able to compare tax burdens.
Before you continue to read, take note of the date you are actually reading this column, as well as your state of residence.
For the average taxpayer, nationally, Tax Freedom Day is April 13. There is good news and bad with this year’s date.
The good news is that Tax Freedom Day is eight days earlier than last year, and 14 days earlier than 2007.
The bad news is also the reason for this year’s earlier date. First, the economic downturn has reduced tax collections even faster than it has reduced income; and, second, the federal stimulus includes large temporary tax cuts for 2009 and 2010.
Still, the average taxpayer will work their first 103 days of 2009 for the government. To put that reality in perspective, Americans will pay more in taxes than they will spend on food, clothing and housing combined.
Don’t want to think of yourself as average? OK, you just might be above, or below average as a U.S. taxpayer.
Let’s find the answer for you in the Tax Foundation data by state.
If you reside in the District of Columbia, Hawaii, Illinois, Wisconsin or Utah, you are “average” in that April 13 is Tax Freedom Day for you and the average U.S. taxpayer this year.
But if you live in any of the other 46 states, your total federal and state tax bill will be either better (you pay less than the national average, which places you in the above average taxpayer category) or worse (you pay more than the national average, which places you in the below average taxpayer category).
Want to hone in on your situation? Here are the hard dates for your personal reference.
Live in any of 35 states and you are doing better than average. Examples include: Tennessee (April 5), Texas (April 6), Florida (April 9), Delaware (April 11), et al.
Live in any of the top 10 states (as noted at the outset) and you are doing better than 80 percent of all states. Here’s the Tax Freedom Day for each: Alaska (March 23), Louisiana (March 28), Mississippi (March 28), South Dakota (March 29), North Dakota and West Virginia (April 1), Alabama and New Mexico (April ) and Kentucky and Montana (April 3).
If you reside in any of the aforementioned states, you are in better relative tax shape regarding government-imposed burdens than taxpayers in the next groups of states. That’s good news for you and for many other readers.
Next is the not-so-good news followed by the “bad news bear” states.
Live in the states of Pennsylvania, Rhode Island and Minnesota? Then, you will work a few extra days (one or two) more than the average taxpayer. While that is not good for you, it could be worse. The states where taxpayers must work the longest before reaching Tax Freedom Day this year are: Maryland (April 19), Washington (April 29), California (April 20), New York (April 25), New Jersey (April 29) and Connecticut (April 30).
Yes, taxes are necessary. You can choose to ask yourself three questions: How much tax is necessary for the federal, state and local governments? Or, ask yourself the one essential question: How long, in any year, am I willing to work for government?
Richard Olivastro is a professional member of the National Speakers Association, president of Olivastro Communications and founder of Citizens For Change. He can be reached at Rich@Olivastro.NET or 877.RichSpeaks.