Up until this point of the year, everything you’ve earned has gone to the government. Only money earned in the remaining 252 days of the year is yours to spend as you please.
That’s one way of looking at it, according to the nonpartisan Tax Foundation, which celebrates April 24 as Tax Freedom Day, the day Americans’ earnings start going into their own wallets instead of government coffers.
“Tax Freedom Day is a significant date for taxpayers and lawmakers because it represents how long Americans as a whole have to work in order to pay the nation’s tax burden,” economist Kyle Pomerleau wrote in the annual report.
The date of Tax Freedom Day is calculated by adding up all federal, state, and local taxes and dividing them by nationwide income. The total tax bill in 2015, almost $5 trillion, is about one-third of national income.
That’s more than the country will spend on housing, clothing, and food combined, Pomerleau writes.
In the early decades of the 20th century, Americans would routinely have their tax burden paid off by the end of January. The latest Tax Freedom Day was May 1, 2000, and it has fallen after April 9 every year since the 1960s. This year, Tax Freedom Day is one day later than in 2014 because economic growth has boosted tax revenue.
Technically, the real nationwide Tax Freedom Day might be considered May 8. That’s how long it takes the nation to work off all the money the federal government borrows as well. By this metric, the latest Tax Freedom Day was May 25, 1945.
April 24 is Tax Freedom Day for the nationwide income and taxes, but it’s also possible to calculate the date by state, using specific state taxes and incomes. Living in the right state can make Tax Freedom Day arrive more than a month earlier. In Louisiana, Tax Freedom Day is April 2, whereas Connecticut residents will keep working to pay for government at all levels until May 13.
