Tax Foundation Releases Tax Freedom Day 2016 Report
April 6, 2016
Tax Freedom Day®, the day when the nation as a whole has earned enough money to pay its total tax bill for the year, will fall on April 24. Tax Freedom Day takes all federal, state, and local taxes and divides them by the nation’s income. In 2016, Americans will pay $3.34 trillion in federal taxes and $1.64 trillion in state and local taxes, for a total tax bill of $4.99 trillion, or 31 percent of national income. This year, Tax Freedom Day falls on April 24th, or 114 days into the year (excluding Leap Day).
Tax Freedom Day 2016 is one day earlier than last year, due to slightly lower federal tax collections as a proportion to the economy (primarily the permanent extenders package passed late last year). If you include federal borrowing, which represents future taxes owed, Tax Freedom Day would occur 16 days later on May 10. The latest-ever deficit-inclusive Tax Freedom Day occurred during World War II on May 25, 1945. Interestingly, Americans will collectively spend more on taxes in 2016 than they will on food, clothing, and housing combined.
State Tax Freedom Days range from April 5 (Mississippi) to May 21 (Connecticut). State TFDs are driven by (1) the amount of federal taxes paid by residents in each state and (2) state and local tax burden.
Check out our full Tax Freedom Day 2016 report here.
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