Getting Ready for Tax Freedom Day

April 11, 2006

Just in time for the tax-filing deadline, we’ll be releasing our much-anticipated Tax Freedom Day calculation for 2006 tomorrow.

The full study will be posted at at 9:00am EST tomorrow, April 12. Be sure to check back then.

In the meantime, we’ve also released a thorough rebuttal of several Tax Freedom Day criticisms made by the Center on Budget and Policy Priorities. Here’s the bottom line:

Each year, the Center on Budget and Policy Priorities (CBPP) releases a criticism of the Tax Foundation’s annual calculation of Tax Freedom Day. Their criticism relies on three main arguments, none of which stand up to close scrutiny.

First, they assert that Tax Freedom Day should focus only on tax burdens of the middle one-fifth of earners, and ignore the taxes paid by the remaining four-fifths of Americans. Second, they assert that the Tax Foundation should employ the CBPP’s unofficial preferred definitions of “income” and “tax” rather than the official definitions used by U.S. government statistical agencies. Finally, they assert that the Tax Foundation’s state and local tax burden estimates are unreliable because—like all statistical estimates based on official government data—initial estimates are revised when improved data become available.

All three criticisms rely on either factual errors, unsupportable value judgments or misleading interpretations of the Tax Foundation’s tax burden estimates. For these reasons, the CBPP’s criticisms do not constitute a serious critique of the Tax Foundation’s established methodology for estimating the nation’s average annual tax burden.

Read the full rebuttal here.


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