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Tax Freedom Day on April 18

Each year since 1990 the Tax Foundation has published Tax Freedom Day. The Tax Foundation calculates the total of federal, state and local taxes as a percentage of national income and selects that date.

For 2013 Tax Freedom Day will be April 18. This is five days later than 2012. The change reflects tax increases in the American Taxpayer Relief Act and the Affordable Care Act. The top rates for upper-income taxpayers increased to 39.6% for income taxes and 23.8% for capital gains taxes under the two laws.

The Tax Foundation estimates that there will be $2.76 trillion in federal taxes and $1.45 trillion in state taxes, for a total of $4.22 trillion. This represents 29.4% of the U.S. economy. April 18 equals 29.4% of the days in 2013.

If the federal deficit is included, then Tax Freedom Day is extended another 21 days. With the addition of the deficit, Tax Freedom Day is May 9.

The Tax Foundation also calculates state Tax Freedom Days. The latest dates will be Connecticut on May 13, New York on May 6, New Jersey on May 4, Massachusetts on April 25, Illinois on April 25 and California on April 24. The lowest tax states will have earlier Tax Freedom Days. Mississippi and Louisiana both celebrated Tax Freedom Day on March 29.

Since the 1960s, Tax Freedom Day has typically been during the second or third week of April. Tax Freedom Day for 2013 reflects 32 days for federal income taxes, 24 days for social insurance taxes, 12 days for property taxes, 12 days for state sales and excise taxes, eight days for state and local income taxes and several days for other categories.

Editor's Note: The trend in the Tax Freedom Day is useful in understanding the changes in overall tax levels. Several Washington commentators have noted that the calculation could also be done using the taxes paid by the median taxpayer. This would be the taxpayer with 50% of individuals paying more tax and 50% paying less tax. At present, no commentators are reporting that date. If another organization reports the Tax Freedom Day using another method, your editor will share that information.

Published April 5, 2013

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