It’s the time of year when we think more about taxes.  Our completed returns show just how much we paid last year to the government.  Collectively, it’s a big number.  According to the non-partisan Tax Foundation, Americans paid a total of $4.2 trillion in 2013 in federal, state and local taxes.

That number will be a little bigger this year.  The Tax Foundation’s annual report says our total tax bill for 2014 will be $4.5 trillion or 30.2 percent of our income.  The Foundation says our Tax Freedom Day—the day when the nation as a whole has earned enough to pay the entire tax bill–is April 21st, or 111 days into the year.

In other words, the average taxpaying American works almost four months out of the year just to pay for government.

April 21st is the average date for the nation.  The state’s tax freedom day varies depending on a variety of factors.  Connecticut and New Jersey have the largest tax burdens.  Residents there have to work until May 9th to cover this year’s tax liability.  West Virginia’s tax freedom day is tomorrow, April 10th.

The Foundation says our national tax freedom day is three days later than last year because of the continued slow economic recovery.  A sluggish economy means less activity that generates tax collections.

Despite the fact that the average American works nearly one third of the year to pay all the taxes due, it’s still not enough to pay all the bills.  The Foundation reports that “Since 2002, federal expenses have exceeded federal revenues, with the budget deficit exceeding $1 trillion annually from 2009 to 2012 and over $800 billion in 2013.  In 2014, the deficit will continue to decline to $636 billion.”

Our total debt stands at $17.6 trillion and growing.

Here’s another way to look at our total tax liability: The Foundation says in 2014 Americans will spend more on taxes than on food, clothing and housing combined.  That’s stunning.  No wonder many people recoil at the possibility of paying more taxes, even if it means building a new road or a school to fulfill a community need.

We understand the necessity of paying for the services we expect government to provide, but that’s not what fuels an individual’s desire to work, strive and achieve.  As the late economist Milton Friedman said, the government is not a patron. “That is at odds with the free man’s belief in his own responsibility for his own destiny.”

As the tax freedom day stretches ever later in the year, the less likely individuals will be to apply the work ethic and take the risk that generates wealth.

 

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Comments

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  • Bobby May

    Republicans believe every day is the Fourth of July, but the democrats believe every day is April 15.
    Ronald Reagan

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  • Charleston

    Jack Lew's statements during congressional testimony to the Senate Finance Committee on Oct 10, 2013:
    ''Let me remind everyone, principal on the debt is not something we pay out of our cash flow of revenues. Principal on the debt is something that is a function of the markets rolling over.”
    In other words, Lew’s description of the way the government handles its now-$17-trillion-plus debt mirrors the Securities and Exchange Commission’s definition of a Ponzi scheme. We are in big trouble folks.

    • Hop'sHip

      Most economists would agree with Mr. Lew. If rolling over debt constitutes a "Ponzi scheme", then most large corporations are guilty of such. Of the Fortune 500 corporations, only around 25 are debt free, even during this time when most are flush with cash.

      • Oh Did Ya?

        Big difference....those corps have positive cash flow to pay the debt. They don't continue to borrow to pay for deficits.

    • Shawn H

      Most people can't see it, or they don't want to see it. We are in for a major "reset". People had better prepare.

  • ole sasquatch

    Well heck when the Dems are challenged at election time they've got to have this extra money for giveaways to win the all important elections.
    If a giant asteroid was heading toward earth, given a choice of winning an election or assured obliteration the national dems. would pick win the election. That's what we are dealing with.

    • Aaron

      Given that Republicans have increased the national debt as well as Democrats, I don't think our tax day problems are a partisan issue. About the only difference I can see in the two parties is in what they waste taxpayer money on.

      • ViennaGuy

        Agreed; the national debt is not a partisan issue. Both parties are to blame for it.

        • ole sasquatch

          To an extent. But tell me why we can't get the Dems to talk about it. The Repub. want to make it an issue for election time but we can't get the Dems to engage even though were on the verge of bankruptcy. Tell me why would the Dems. want to stay silent? Never mind I'll answer that because that would interfere with the use of taxpayer revenue which they use the same as political contributions and they can do that because they are ethically challenged and the party in power. Win, Win, Win, the election! Until the public figures out what is going on we continue into the doldrums of socialism.

      • ole sasquatch

        10 trillion dollar debt since 1776, enter Obama, in 5 yrs. 17 trillion dollar debt.
        They must win the elections. It is so very, very important that they win the elections.

        • Aaron

          It was closer to $11 trillion when Obama took over but who's counting pennies given that Republican Bush took was responsible for $5.5 trillion of his own debt. Like I said, it's not a partisan issue.

  • Hillboy

    The Tax Foundation throws pretty much every source of federal revenue into their calculations so it isn't clear exactly what this means to the average person. They include social insurance, which I assume includes both FICA and Medicare taxes. That is all well and good but in the long run on average, most people are going to get that money back (usually more). They also throw in corporate taxes paid, which adds to the total but doesn't seem relevant to the individual tax payer.

  • jay zoom

    take 40% of the money we ship overseas for aid and diasters and keep it home and the debt will be paid off in a few years take care of our own and let the ones across the creek take care of themselves. I have yet to see a foreign country send money to us to feed the hungry or rebuild a community after a flood tornado or hurricane or anything for that matter. take care of # 1 and that is our own people.THANKS

    • WestVa.Gent

      +1. I've been saying this for years!

  • Harvey

    False premise, Hoppy. The tax freedom day has held fairly steady within a 10 to 15 day window since the late 1960s. Up some years, down others. Not a constant spiral upwards. Aging population. Defense needs up around the world. Crumbling infrastructure. Administrative needs to promote fair trade and commerce. System of courts. Social security, Medicare and Medicaid are programs the American people seem to want and that are a popular means to 'promote the general welfare." Just need the collective guts to prioritize the nation's needs and reasonable wants and then raise enough revenue to pay the bills. No free lunch, Hoppy, and no manipulation of the calendar will make that truism go away--not even quotes from old Uncle Milton.

  • DWM

    How could you have written an entire treatise on tax and not mentioned that there is no such thing as an average taxpayer? 48% of the population pay no income tax! What do they care what the federal government spends, they aren't paying for it anyhow, and more than likely, it is coming back to them in benefits.

    Isn't it crazy to think that nearly 50% of the voters in this country vote knowing that if they elect a person that will give them more benefits they don't have to worry about it because they won't be the ones paying the taxes to pay for those benefits!! And to top it all, if you complain that you don't want to pay any more in taxes, YOU'RE THE GREEDY ONE!

    And we wonder how we elected a loon like Obama over Romeny?

    • ole sasquatch

      +1

  • David McKain

    I bet that people like Mitt Romney (with <15% tax rate) and the Koch brothers pay their tax burden off a lot sooner than regular Joes.
    Maybe the date is being pushed further down the calendar because government costs are increasing with economic costs while the monies to cover those costs are trickling up to the oligarchy who write the rules (i.e. fund the lawmakers) while pay for regular Joes falls behind.

    • DWM

      Simple solution, everyone pays the same %. If it is 10% and Romney makes 1 Mil he pays $100,000, someone else makes $10,000 they pay, they pay $1000.

      If we did this our economy would boom.

      • Time for a National Change

        If only a grassroots effort could be launched by all of the non-wealthy people to implement a standard tax rate for all. Then tell the politicians you won't get elected or reflected unless you support that proposal and public mandate!!!

      • Hillboy

        problem is when you have a Congress made up of millionaires they are going to stick with a tax code that protects their wealth. They rather pay at a nominally higher rate and throw in some loopholes to bring it down.

    • bulldog95

      Boowhoo.

      That 15% is the rate set for investments. So you want to be taxed at 30% for earned money and then you take a chunk of that money and invest it to be taxed again at 30%? Really? Thats why it is at 15%, its already been hit once before.

    • Aaron

      Would you have investment income taxed at higher rate? If so, why?

    • WV77Steve

      Don't forget Soros and his two kids! I am sure they are in the same boat or are we to only attack conservatives?

  • Mason County Contrarian

    "Tax Foundation"? "Non-partisan"?

    There is no such thing as a "non-partisan" organization.

    • The bookman

      I would have to agree that just because Tax Foundation describes themselves as non partisan, that doesn't make them non partisan. That is also true of most other organizations. What we shouldn't do is immediately discount information from partisan sources as inaccurate. I have found it is best to verify to the best of your ability the data they provide, but avoid using their commentary in forming an opinion. The Tax Foundation is loaded with conservative brokers and those who would benefit from their message of low taxes to spur economic growth. I happen to agree with them, but they should be, and Hoppy should be, a little more honest their approach.

  • WhgFeeling

    The problem I have with this article is it lends to false thinking that everyone pays 30%. When in fact a LARGE portion pay NOTHING and get a "RETURN" of more than they ever pay in taxes. I am a big proponent to FLAT TAX!!!! Everyone pays the same percentage with no deductions.

  • rick g

    Good article Hoppy but an important point you failed to mention is that "those evil feds" give the state of West Virginia more funds than the state gives to the feds back in taxes.

    • Medman

      rick, Your logic is the exact reason we have a $17.6 T debt. Everyone thinks it is OK to take Federal money because it is "free". It is like your kids loving you into bankruptcy because you give them things you cannot afford.

      • Wirerowe

        Agree

      • rick g

        I didn't say it was a good thing. It is not ok that we take more money than we put in plain and simple. The state is no better than the federal government that gets its funding from china.

      • Shadow

        +1