This year we celebrate Tax Freedom Day on Wednesday, April 16. That’s the day we stop working for the state, local and federal government and start working for ourselves. For average workers, all of our earnings for the first 3 1/2 months of the year go to pay federal, state and local taxes.
What Is Tax Freedom Day?
Tax Freedom Day® is the day when the nation as a whole has earned enough money to pay its total tax bill for the year. Tax Freedom Day takes all federal, state, and local taxes and divides them by the nation’s income. In 2019, Americans will pay $3.42 trillion in federal taxes and $1.86 trillion in state and local taxes, for a total tax bill of $5.29 trillion, or 29 percent of national income. This year, Tax Freedom Day falls on April 16, or 105 days into the year.
Tax Freedom Day over The Last 5 Years
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.
This year, Tax Freedom Day falls on April 16, or 105 days into the year.
In 2019, Americans will pay $3.4 trillion in federal taxes and $1.8 trillion in state and local taxes, for a total bill of over $5.2 trillion, or 29 percent of the nation’s income.
Americans will collectively spend more on taxes in 2019 than they will on food, clothing, and housing combined.
If you include annual federal borrowing, which represents future taxes owed, Tax Freedom Day would occur 22 days later, on May 8.
Tax Freedom Day in 2018 and 2019 was five days earlier than it was in 2017, in large part due to the recent federal tax law, the Tax Cuts and Jobs Act.