Tax Freedom Day

What is a tax freedom day?

A tax freedom day is the date each year when the average citizen has earned enough money to pay all federal taxes, state taxes, and local taxes. For example, a US tax freedom day is the day when an average American has earned enough money to pay all federal taxes, state taxes, and local taxes. A Thailands tax freedom day is likewise the day when an average Thai has earned enough money to pay all taxes.

History of Tax Freedom Day

In 1944 - Tax freedom day was the 90th day

According to the Tax Foundation, in 1944, the average American had to work the first 90 days of the year (from January 1 to March 30) to pay all taxes (federal taxes, state taxes, and local taxes) owed to the government. Thus, the tax freedom day was the 90th day of the year.

In 1964 - Tax freedom day was the 104th day

By 1964, the number of days increased to 104 (all the way to April 13). Tax freedom day was then the 104th day and in 1984 Tax Freedom Day was April 15 (106 days).  

In 2000 - Tax freedom day was the 121st day

By 2000 the tax freedom day was pushed back to May 1 (121 days). Tax freedom day retreated back into April during 2002, primarily as a result of the US recession and the 2001 tax cuts.

However, it does make a big difference where you live, as state and local tax rates can greatly affect when your particular Tax Freedom Day occurs. Americans spend more time working for tax to pay the government than they do for any other expense.

What is a Tax Foundation?

A Tax Foundation is a nonpartisan, nonprofit group that provides tax education to tax practitioners and the general public.