Tens of millions of Americans are once again writing checks to the federal government for their taxes. Even those who get refunds likely spent time and money filling out their returns. You’d be hard-pressed to find anyone, on either side of the aisle, who enjoys the way our tax system works.
So here’s something that will make you even more frustrated. Forget about April 15 entirely. Instead, try calculating how long it takes you to earn enough money to pay your total tax bill for the year.
The experts at the Tax Foundation did just that. They found that Americans don’t earn enough money to pay the nation’s tax burden until April 24 — 114 days into the year.
This date has been dubbed “Tax Freedom Day,” but there’s nothing to celebrate. It is just a reminder that it takes Americans roughly a third of the year to earn the total $4.85 trillion that we owe to the tax man. Even when you combine the cost of food, clothing and housing, Americans still haven’t spent as much as we’re giving to the government.
Taxpayers in some states have it better than others. While the national “Tax Freedom Day” is held on April 24, Louisiana celebrates it on April 2. South Dakota’s version is on April 8. Fourteen states actually pass this milestone before April 15 even rolls around.
Others aren’t so lucky. At the other end of the spectrum, 15 states fall after the national average of April 24. The high-tax states of Massachusetts, California, New York and New Jersey round off the list. Taxpayers in last-place Connecticut aren’t free until May 13.
No matter where you live, Americans are working longer to pay for the cost of government. Tax Freedom Day 2015 is three days later than it was in 2014 — and that was three days later than it was in 2013.
Every year, we have less money to spend in our local communities. Every year, we can’t save as much for a down payment on a house, our kids’ college education or our retirement. And every year, it’s harder to invest wisely and plan for the future.
So where is this money going? Of the $4.85 trillion that Americans are expected to pay in taxes this year, one-third — $1.5 trillion — will find its way to local government or state capitals. The rest — $3.3 trillion — winds up in Washington, D.C.
That’s no small amount. It’s actually the biggest tax haul the IRS has ever pulled in. It’s more money than the entire economy of Germany — the fourth biggest economy in the world. But it’s still not enough to pay for all of the government’s planned spending for the year.
In fiscal year 2015, the federal government is expected to run a $486 billion budget shortfall. This will increase the national debt from $18.1 trillion to over $18.5 trillion.
No wonder Tax Freedom Day keeps getting pushed back — we have to pay for years of politicians’ broken promises. Thanks to both parties, the national debt has more than doubled, from nearly $8 trillion to $18.1 trillion today, in just the past 10 years. Taxes are going to keep getting higher as long as Washington continues overspending our hard-earned money.
Now it’s up to you and me to stop politicians from making this situation worse. Congress is currently debating the fiscal year 2016 budget. By September, legislators have to decide whether to stick to the Budget Control Act, a bipartisan bill that became law in 2011. It set the levels for discretionary spending — the third of the budget that isn’t spent on Social Security, Medicare and Medicaid — until 2021.
Those levels are keeping parts of the budget from growing even faster. But some members of both parties now want to abandon the Budget Control Act. They’re essentially arguing that Washington should add even more to the national debt, which you and I will have to pay eventually.
Remember that this week. Whether you’re getting a refund or writing a check to the IRS, we should all tell our representatives in Washington to stick to the modest bipartisan spending levels established in the Budget Control Act. If we don’t limit Washington’s overspending, Tax Freedom Day is only going to get later every year. (IBD)