Here’s a bit of news to brighten your day ahead at work – at least three months of your much-needed wages will be heading nowhere near your own pocket this year, but straight in the hands of the taxman.
Nothing like knowing that nearly a third of the work you’re going to do today isn’t even for your own benefit…right?
According to new data revealed by the Tax Foundation this Monday, Americans will on average spend a dizzying 29% of their income on the various local, state and federal taxes they really wish they didn’t have to pay. Incredibly, this is more money than most families spend on the likes of housing, clothing and food combined, according to those behind the research.
Or to put it another way which seems to make the whole thing seem even more stark and unpleasant to digest, the average American will this year have to work at least 107 in order to earn enough money to cover their taxes alone.
April 17 this year represents the day the Tax Foundation calls Tax Freedom Day – that being the date upon which the average American household has earned enough to cover its taxes for the year and is from then on actually earning money to pocket. And in a wonderfully bitter twist of irony, April 17 also happens to be the due date for taxes.
Tax Freedom Day has come four days later this year as rising national incomes have in turn led to higher rates of tax and more taxes being collected.
“As the economic recovery continues, the growth in individual incomes and corporate profits will increase tax revenues and push Tax Freedom Day ever later in the year,” according to the Tax Foundation by way of statement this week.
On a slightly more positive note, Tax Freedom Day for the year 2000 didn’t come until May 1st, a full fortnight later than this year’s. The reason for this was the way in which the US economy was at the time a force to be reckoned with and the average American household was looking at a total tax bill closer to 33% of their total income. Each year, the research group behind the study takes into account national average income and various other data like Social Security, property and sales tax.
However, those of a more left-wing persuasion like the Center on Budget and Policy Priorities for example argue that the research is flawed and therefore the data it presents is not in whole an accurate picture of the US tax situation. According to the folks over at the Center on Budget and Policy Priorities, it is in fact a “strikingly misleading impression of tax burdens” that for the most has little to no real credibility.
They argue that the apparent 29% total tax contribution mentioned by the study is actually considerably higher than at least 80% of the US public actually pays.