Tax Freedom Day will fall on April 19 this year, 109 days into the calendar year. According to the Tax Foundation, Tax Freedom Day is the date on which the nation as a whole has earned enough money to pay its full tax bill for the year, taking into account all federal, state and local taxes. The day it hits will vary for each state since states have varying tax rates.
Taxes Paid by Americans
The IRS collected more than $3.4 trillion in gross taxes in 2017 according to its latest data. The Tax Foundation notes that in 2018, Americans will pay $3.39 trillion in federal taxes and $1.80 trillion in state and local taxes, for a total tax bill of $5.19 trillion, or 30 percent of national income.
The Tax Foundation said that Americans will work the longest to pay federal, state, and local individual income taxes (44 days). Payroll taxes will take 26 days to pay, followed by sales and excise taxes (15 days), corporate income taxes (seven days), and property taxes (11 days). The remaining six days are spent paying estate and inheritance taxes, customs duties, and other taxes.
As a percentage of spending, Americans pay more in taxes than they do on food, clothing and housing combined.
What is Your Tax Rate?
Do you know how much you pay in taxes?
According to a recent study, many Americans don’t. In a study that was conducted by Michigan State University, 85% of the adults surveyed overstated their total tax burdens, in some cases quite dramatically.
Some of that was due to the respondents’ own biases, but a lack of knowledge about a complex tax code was apparently a factor was well.