They say death and taxes are the only two constants in life. Unlike death, however, tax freedom day represents a break from the cliché –at least temporarily!
Tax Freedom Day
Tax Freedom Day is a different sort of holiday. Although not actually celebrated, Tax Freedom Day is the first day of the year at which, theoretically at least, the nation as a whole has earned enough income to pay the sum of all its annual taxes. Calculated annually by the Tax Foundation, a Washington, D.C. based research company, Tax Freedom Day is the day when all money considered income by the US Government and every dollar considered an official tax by the US Government is finally equal. Federal, state, and local taxes are all considered in the equation.
Tax Freedom Day was brought about and copyrighted by a Florida businessman named Dallas Hostetler in 1948. Over the next two decades, this businessman calculated Tax Freedom Day. Finally, in 1971, Dallas Hostetler retired and transferred the copyright to the aforementioned Tax Foundation which has calculated Tax Freedom Day ever since.
This day is used as a tool for showing the amounts of money in taxes that are used to fund all of the various government programs. Tax Freedom Day illustrates when the nation has finally earned enough to pay in taxes that will cover the annual costs of the government. Also, in 1990, the Tax Foundation also began to calculate the same information for individual states.
Tax Freedom Day is also a good indicator of the changing balance of tax percentages and the amounts of money being used in government programs. For instance, the day arrived on the 26th of April in 2006 and the latest Tax Freedom Day was on May 3rd in 2000. In 1900, the earliest Tax Freedom Day arrived on the 22nd of January.
Used in this manner, Tax Freedom Day is an interesting way of clearly displaying the cost of running the government in terms of how long it takes each year for workers and their taxes to cover those costs. Frankly, there should be fireworks or something!