Tax Freedom Day Keeps Changing
July 28, 2016 at 4:25 p.m.
By Gary [email protected]
According to the Tax Foundation, "Tax Freedom Day" was April 30 this year.
That's the day when local, state and federal officials - taxers at all levels - stopped digging into our wallets.[[In-content Ad]]W's tax cuts dropped the day from May 1 in 2001 to April 21 in 2002. The day rolled back to April 18 in 2003.
But it moved up a day to April 19 in 2004, and a full week to April 26 in 2005.
It was April 28 in 2006, which is just about where it was when W took office.
The recent increases are doubly disturbing because there have been no big federal tax hikes.
Curtis S. Dubay and Scott A. Hodge of the Tax Foundation explain:
"The nation's tax burden tends to rise as income rises because thriving taxpayers are pushed into higher income tax brackets at the federal and state levels. Also, the federal government raises the income cap on Social Security taxes each year, and local governments have been collecting much more in property taxes."
The Tax Foundation gives us some interesting tidbits regarding government's bite out of our livelihoods.
The average American works 13 days a year to pay for his/her clothing.
Food and transportation take 30 days to fund. Next is state and local taxes, taking 41 days of income to satisfy.
Health care takes 52 days, housing and household operations take 62 days.
And coming in at number one for the average taxpayer is ponying up for Uncle Sam - a whopping 79 days in 2007.
Don't look for it to improve anytime soon.
Federal outlays were up 9 percent last year, the highest increase since 1990.
The Cato Institute reports total federal spending is up 45 percent since W took office in 2001.
On the heels of all that sobering news comes a report from the Heritage Foundation last week.
Analyst Shanea Watkins says the budget resolution adopted recently by the House of Representative will cost the average U.S. taxpayer an additional $3,026 in taxes by 2012.
As they relate specifically to Indiana, the new tax policies have the potential to cause an average loss of $459 in personal income, a slowing of employment growth amounting to 21,383 lost jobs, and a $2 billion hit to the state economy.
Indiana taxpayers will fare a little better than the average U.S. taxpayer, paying "only" an additional $2,730 more in federal taxes.
Heritage offers a state-by-state breakdown by congressional district of the increases taxpayers will likely absorb if the current budget resolution is adopted.
While the average increase for Indiana is $2,730, congressional district averages vary widely.
Heritage found the 5th District will get the biggest shock at $3,563 per taxpayer. Taxpayers in the 7th District get off the easiest with an average tax increase of $2,198.
In our own 3rd District, we can expect a $2,875 hike. (For the record, our U.S. Rep. Mark Souder voted against the budget resolution.)
Watkins writes:
"The House leadership has proposed to increase spending over the next five years. Given the leadership's avowed commitment to paying for spending increases, tax revenues will have to rise. Which taxes will have to rise is unclear, as budget resolutions are notoriously short on details. ...
"As it currently stands, the House budget resolution proposes to allow the Bush tax cuts to expire. This, in turn, means the House leadership could be allowing American taxpayers to assume a large and expensive tax increase upon the expiration of these tax cuts. ...
"Allowing the Bush tax cuts to expire could cause great damage to the economy, reducing both job creation and economic growth.
"In addition to the increased tax burden, Americans could also see their personal income decrease by an average of $502 due to a weaker economy. Moreover, the budget resolution could damage employment growth, causing about 1 million fewer jobs to be created, and has the potential to damage economic output by over $100 billion nationally. The average cost of the House budget resolution to each congressional district amounts to the potential loss of 2,284 jobs that would have otherwise been created and a loss in economic output by an average $240 million.
"The culprit for these negative impacts is higher taxes. Many economists believe that higher taxes, particularly on capital, cause the level of private investment to fall, thereby slowing productivity improvements and weakening the earning capacity of households. Wages and business earnings, which are closely tied to productivity, would fall as well."
You can read the whole Heritage Foundation report at:
www.heritage.org/Research/Taxes/bg2031.cfm
All of this cements my previous and numerous assertions that our nation's budget woes are not caused by taxpayers paying too little, but government spending too much.
How can an apparent majority of our elected officials fail to grasp such an unbelievably simple concept?
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According to the Tax Foundation, "Tax Freedom Day" was April 30 this year.
That's the day when local, state and federal officials - taxers at all levels - stopped digging into our wallets.[[In-content Ad]]W's tax cuts dropped the day from May 1 in 2001 to April 21 in 2002. The day rolled back to April 18 in 2003.
But it moved up a day to April 19 in 2004, and a full week to April 26 in 2005.
It was April 28 in 2006, which is just about where it was when W took office.
The recent increases are doubly disturbing because there have been no big federal tax hikes.
Curtis S. Dubay and Scott A. Hodge of the Tax Foundation explain:
"The nation's tax burden tends to rise as income rises because thriving taxpayers are pushed into higher income tax brackets at the federal and state levels. Also, the federal government raises the income cap on Social Security taxes each year, and local governments have been collecting much more in property taxes."
The Tax Foundation gives us some interesting tidbits regarding government's bite out of our livelihoods.
The average American works 13 days a year to pay for his/her clothing.
Food and transportation take 30 days to fund. Next is state and local taxes, taking 41 days of income to satisfy.
Health care takes 52 days, housing and household operations take 62 days.
And coming in at number one for the average taxpayer is ponying up for Uncle Sam - a whopping 79 days in 2007.
Don't look for it to improve anytime soon.
Federal outlays were up 9 percent last year, the highest increase since 1990.
The Cato Institute reports total federal spending is up 45 percent since W took office in 2001.
On the heels of all that sobering news comes a report from the Heritage Foundation last week.
Analyst Shanea Watkins says the budget resolution adopted recently by the House of Representative will cost the average U.S. taxpayer an additional $3,026 in taxes by 2012.
As they relate specifically to Indiana, the new tax policies have the potential to cause an average loss of $459 in personal income, a slowing of employment growth amounting to 21,383 lost jobs, and a $2 billion hit to the state economy.
Indiana taxpayers will fare a little better than the average U.S. taxpayer, paying "only" an additional $2,730 more in federal taxes.
Heritage offers a state-by-state breakdown by congressional district of the increases taxpayers will likely absorb if the current budget resolution is adopted.
While the average increase for Indiana is $2,730, congressional district averages vary widely.
Heritage found the 5th District will get the biggest shock at $3,563 per taxpayer. Taxpayers in the 7th District get off the easiest with an average tax increase of $2,198.
In our own 3rd District, we can expect a $2,875 hike. (For the record, our U.S. Rep. Mark Souder voted against the budget resolution.)
Watkins writes:
"The House leadership has proposed to increase spending over the next five years. Given the leadership's avowed commitment to paying for spending increases, tax revenues will have to rise. Which taxes will have to rise is unclear, as budget resolutions are notoriously short on details. ...
"As it currently stands, the House budget resolution proposes to allow the Bush tax cuts to expire. This, in turn, means the House leadership could be allowing American taxpayers to assume a large and expensive tax increase upon the expiration of these tax cuts. ...
"Allowing the Bush tax cuts to expire could cause great damage to the economy, reducing both job creation and economic growth.
"In addition to the increased tax burden, Americans could also see their personal income decrease by an average of $502 due to a weaker economy. Moreover, the budget resolution could damage employment growth, causing about 1 million fewer jobs to be created, and has the potential to damage economic output by over $100 billion nationally. The average cost of the House budget resolution to each congressional district amounts to the potential loss of 2,284 jobs that would have otherwise been created and a loss in economic output by an average $240 million.
"The culprit for these negative impacts is higher taxes. Many economists believe that higher taxes, particularly on capital, cause the level of private investment to fall, thereby slowing productivity improvements and weakening the earning capacity of households. Wages and business earnings, which are closely tied to productivity, would fall as well."
You can read the whole Heritage Foundation report at:
www.heritage.org/Research/Taxes/bg2031.cfm
All of this cements my previous and numerous assertions that our nation's budget woes are not caused by taxpayers paying too little, but government spending too much.
How can an apparent majority of our elected officials fail to grasp such an unbelievably simple concept?
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