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

  • Bobby May

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

    Read more at http://www.brainyquote.com/quotes/authors/r/ronald_reagan.html#PFcptSAB6iymdJGe.99

  • 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?

  • 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

  • Aaron

    In addition to the deficit, both social security and Medicare face massive unfunded liabilities. Through 2009, Social Security has unfunded liabilities of $17. trillion and total Medicare obligations are $89.3 trillion for a total of $106.8 trillion dollars.

    What is scary is that all of this is before the added cost associated with the Affordable Care Act, which will be the largest tax in terms of dollars added onto the American tax payer.

    Yet we keep spending and spending and spending. The path is unsustainable and will bankrupt America if changes are not made.

    • The bookman

      I couldn't help but cry as I read this commentary this morning. As I read it I couldn't help but recognize that on our current rate of spending, April 21st nationally is not long enough to meet our obligations. And when interest rates are permitted to rise by the Fed, our fiscal situation will quickly reach critical mass.

      Can we afford more taxes, or can we survive the current spending path? I think both parties have some soul searching to do, and the American people have got to realize the party is over!

  • Hop'sHip

    I guess I'll have to wait on that Hoppy commentary on greater concentration of wealth in this country and settle for his annual bemoaning of the tax burden preventing even greater concentrations of wealth. Over half of our tax burden at the federal level is because of healthcare and defense costs. So I guess a good start would be to eliminate government spending there.

    • bulldog95

      And where is the motivation for people to want to make more of themselves and someday have a concentration of wealth? Oh that’s right, you refuse to even give it more than one seconds thought that maybe, just maybe all those handouts that people get stop that motivation. You refuse to think for more than one second that some people are happy enough to get by on food stamps, HUD, a welfare check, or disability, or unlimited unemployment. The reality that you and others refuse to see is just what I mentioned. Not everyone abuses or stays on those programs but more than enough stay on them, perfectly happy with free housing, free food, a free cell phone, and repeat next month. You will however pick out one thing I have said if you even reply and go ohhhh a cell phone, I will just quit working for a cell phone.

    • The bookman

      You continue to raise this issue, yet under Bush, the wealth divide was shrinking. It is our current fiscal policy at the Fed, of which you have supported and I have been critical, that has led to the ever increasing divide. Stop the bond purchases and easing policy, as it has propelled the markets upward in a stagnant economy, concentrating wealth among the trading elite and those who are heavily invested in the markets.

      If we allow the markets to perform realistically, capital will flow out of the markets in search of better returns.

      • Hop'sHip

        I see no evidence that "under Bush the wealth divide was shrinking." There has been an upward trend for over three decades in pre-tax divide (as that Economist's article you recommended pointed out) and an even faster growth in post-tax divide given tax policies that have favored the wealthy. There may have been some time during the Bush years when the housing bubble made it appear that lower income people were gaining wealth but that did burst in a big way leaving many under water. As for the Fed's action, they have been left with little choice given the Congress' inaction on the fiscal side.

        • Aaron

          Sorry Hop, I didn't see your previous post.

        • The bookman

          And here is an article from the left leaning Post......http://www.washingtonpost.com/news/volokh-conspiracy/wp/2014/01/28/if-we-want-more-income-equality-should-we-return-to-the-economy-of-george-w-bush/

          Sleep tight!

        • The bookman

          Here's another article to keep you up at night....http://www.forbes.com/sites/timworstall/2012/09/22/the-amazing-thing-about-american-inequality-how-equal-the-country-is/

          Can't wait to tell DP you have a

          J O B!!!!!!!!!!!!

          • Hop'sHip

            Was able to find your Post article and it did give me pause to reconsider. Still my major concern was long-term trend to increased inequality and what it does to social cohesion. And I think that this trend has coincided with policies that have favored capital over labor. But thanks to you I am still evolving on this. Just think the conversation is worth having. Apparently Hoppy doesn't. He's fixated on the War on Coal!

          • Hop'sHip

            We'll imagine my consternation when I learned that DP doesn't!!!!!!! I'll read your articles when I can get to a computer. Still haven't figured out how to easily cut and paste from this tablet. Thanks!

        • Aaron

          I'm still curious Hop as to how this hurts this country. I did a little research and I could find no quantitative answer. Do you have one of do you just believe it is a social injustice?

      • liberty4all

        +1

    • TB

      The nation will cease the exist when we take from those willing to work and give to those that are not. T Jeffrrson I believe said this.

    • Silas Lynch

      Well, of the two,-- healthcare spending and defense spending by the Federal Government,-- one is specifically in the U.S. Constitution as to being provided by the Federal Government and one is not.

      • Aaron

        It's not? If healthcare benefits all citizens, how does that not meet the Founding Fathers definition of the general Welfare Clause?

        • Silas Lynch

          I knew someone would cite the "Welfare Clause" and I suppose the word "specifically" was easily overlooked-- and if you mean Founder(s) as in Hamilton, I guess one could make that argument but certainly not Madison or Jefferson-- even though Hamilton would certainly have a hard time agreeing to pay for a liver transplant for the habitual drunk out of the national treasury. Do you believe a Doctor's labor is general welfare?

          • Silas Lynch

            The constitutionality of SS depends on the intent of the Welfare clause-- and unlike you, I'm not even confident to know as to why it is in the Constitution.-- A copout answer? yeah, it is but at least it will give me reason to ponder a little today once Hoppy starts droning on about High School or WVU Sports.

          • Aaron

            So how do we salvage SS before it bankrupts us?

          • The bookman

            Well I've already told my parents that they have planned for it and I am not, and I owe them anyway.

          • Aaron

            Oh, I wouldn't say it was bait and I'm not so sure there is a right or wrong answer. James Madison and Alexander Hamilton both signed the Constitution, both were at the convention and they disagreed to the meaning so for me to say you're right or wrong seems a bit arrogant to me.

            It's just been my experience that many will post quotes regarding the general Welfare clause stating they oppose spending under the clause but when questioned about whether SS should be repealed, they either won't comment or commit, which seems just a tad disingenuous to me.

            The most common reply I get is, yes, it's unconstitutional but I've already paid into it so why shouldn't I get mine back?

          • The bookman

            I'll take a stab,

            It is only constitutional to the degree that you, the Federal Government, can provide the benefit to all citizens. I don't believe that our government as currently constituted has the fortitude to restrain itself to those parameters.

            In an earlier post you delineated the unfunded liabilities in Medicare and Social Security. Providing these benefits to the citizens of the United States requires in my mind paying for them. Not funding them to solvency meets the definition of not paying for it. So in the absence of reform, social programs like these would be unconstitutional by any standard, especially considering that these facts are not in dispute regarding the liabilities, and the Congress has irresponsibly not initiated any plan to gain a solvent position. There, I have accepted the bait!

          • Aaron

            I understand the general Welfare clause to the point that I understand why it is in the Constitution to begin with. In the past, when I have discussed the "general Welfare clause" I have preferred to follow Madison's view on it. Saying that, other founders thought differently, including Hamilton.

            Hamilton's view is the one that Associate Justice Joesph Story viewed as Constitutional in his "Commentaries on the Constitution of the United States," although he does give Jefferson's view in "Opinions on the bank of the United States" some credence.

            Story asserted that the clause is "not a grant general legislative power, but instead qualification on the taxing power which includes within it a federal power to spend federal revenues on matters of general interest to the federal government."

            The Supreme Court concurred in the Butler Decision. The key to that interpretation is that spending must benefit all of the people and not just a select group. Universal healthcare certainly meets that criteria.

            While a doctors care may not fit the definition of "general Welfare", providing for the citizens does make economic sense for the United States. The thing is, if existing infrastructure were utilized to provide basic care with catastrophic insurance provided to cover cost that is often written off by hospitals anyhow, the overall cost to taxpayers would be less than the Affordable Care Act.

            I answered your question Silas so how about you give the question I posed to kensgirl a whirl.

            Do you believe Social Security and all the attached programs is unconstitutional and as such, should be eliminated?

        • kensgirl

          They are not to do anything they please to provide for the general welfare, but only to lay taxes for that purpose. To consider the latter phrase not as describing the purpose of the first, but as giving a distinct and independent power to do any act they please which may be good for the Union, would render all the preceding and subsequent enumerations of power completely useless. It would reduce the whole instrument to a single phrase, that of instituting a Congress with power to do whatever would be for the good of the United States; and as they would be the sole judges of the good or evil, it would be also a power to do whatever evil they please...Certainly no such universal power was meant to be given them. It was intended to lace them up straightly within the enumerated powers and those without which, as means, these powers could not be carried into effect. - T. Jefferson

          If Congress can do whatever in their discretion can be done by money, and will promote the General Welfare, the Government is no longer a limited one, possessing enumerated powers, but an indefinite one, subject to particular exceptions. - J. Madison

          • Aaron

            I'm curious kensgirl, while I'm not disagreeing with the comments you posted, I have one question for you.

            Do you think Social Security, Medicare, Medicaid, Welfare and other government programs are unconstitutional and as such, should be repealed?

        • The bookman

          "Provide for common defense" vs "Promote general welfare". "Provide" indicates a direct responsibility, whereas "promote" is more indirect, meaning to encourage. They do not have parallel responsibilities in my view.

          • Aaron

            It's neither here or there but you understand the US is not a capitalist country right?

          • The bookman

            I hear you, I really do! Not a lot a lot of compromise in me. I'm in the no socialism wiggle room camp. Sorry!

          • Aaron

            I'll also add that point we cannot afford is the status quo. What I suggest utilizes infrastructure already in place that would keep costs at a minimum as compared to the "affordable" care act.

          • Aaron

            In case you missed it we are already under the thumb of a massive central government he** bent on providing cradle-to-grave care.

            While Republicans have voted 87,342 to repeal Obamacare, they have yet to suggest a viable replacement.

            I just did.

          • The bookman

            Albeit worthy and noble to provide such benefits, giving the Federal Government any limited authority to implement a smaller version of universal health care will lead to, like all government programs, a much larger version, until we have cradle to grave care. We just can't afford it.

          • Aaron

            First, I agree that our federal government has their hands in far too many cookie jars, education being one of them.

            I also disagree with many of the Supreme Court decisions that relies on the general Welfare Clause as the basis for their spending, including Social Security.

            I also oppose the Affordable Care act as I agree with Ted Kennedy in that essentially this type of "healthcare" is a bill that benefits insurance companies.

            Saying that, I do see a purview for the government to provide basic healthcare for citizens. Utilizing existing infrastructure, the government could very easily provide basic preventive care for all citizens. Additionally, for less than the combination of what hospitals write off added to the economic cost of citizens inability to pay medical cost that results primarily in bankruptcy, the government could provide emergency cost in the manner that Singapore does for it's citizens.

            In the long run, economically, we as a nation would be better off in providing basic care for ALL citizens as opposed to the hodgepodge system that rewards insurance companies while hurting taxpayers.

          • The bookman

            Duly noted, however, do you claim that it is Federal Government's responsibility to provide healthcare to its citizens? I believe that to do that will bankrupt us. For context I think it would be best to read that article and apply it in concert with the Preamble, as there is no way the Federal government would, should, or could "provide" the general welfare to its citizens.

          • Aaron

            It should also be noted that when you quote "provide" vs "promote" you are quoting the preamble and and not Article 1 Section 8, generally referred to as the "Taxing and Spending Clause." The wording for what is widely accepted as the foundation for government spending reads as follows.

            "The Congress shall have Power To lay and collect Taxes, Duties, Imposts and Excises, to pay the Debts and provide for the common Defence and general Welfare of the United States; but all Duties, Imposts and Excises shall be uniform throughout the United States;"

          • The bookman

            I think when the government moves to providing health coverage instead of promoting the general welfare of its citizens, we overstep the federal responsibility as laid out in the Constitution.

            Education IS a great example, in that the Federal Government has no business in meddling in State's delivery of Education to its citizens. Look at all the money that Department wastes, with no mandate derived from the Constitution. And the results? Not competitive when viewed from a world perspective or our previous history prior to the US Department of Education. The Feds have their hands in more than their Constitutional Mandate, and I for one would like to see less control from DC and more from local and state government. These people are closer to the people, and more apt to listen.

          • Aaron

            If promoting the general Welfare is an economic booster, why would we not as a society provide for it?

            Education is the perfect example. There is no constitutional guarantee for Education but we as a society have found that an educated workforce is a more productive workforce thus society is better off?

            Why would we not extend that same concept to healthcare, bearing in mind that I am not in favor or Nixon's healthcare plan that was modified slightly to become what is known as Obamacare?

    • Aaron

      What are the negative impacts on our society as a result of the greater concentration of wealth?

      • Hop'sHip

        Apparently the I.M.F. has been impressed enough by the research on the negative impact of pronounced inequality on economic growth that they now it consider when setting conditions on loans.

        http://www.nytimes.com/2014/04/09/business/economy/in-new-tack-imf-aims-at-income-inequality.html?partner=rss&emc=rss&_r=0

      • Hillboy

        Just from my observations from someone who grew up in the 50s and 60s it appears to me that there is a shrinking middle class and expanding lower class. Perhaps that is regional but I get the feeling it is common in other regions too. A lot of that has to do with the loss of manufacturing jobs that allowed people without college degrees to attain a middle class status. If you have only a high school diploma or less these days you will have a hard time finding a job that will allow you to do that. As more people slide into the lower class they use more government assistance. Somehow, I connect the general lack of opportunity for those who were never cut out for college with the explosion of the rural/small town drug culture. I've seen it in my own family unfortunately.

      • Silas Lynch

        Concentration of wealth in our society is cause for great anguish among portions of our population, often causing a skin condition that turns their skin green with envy and jealousy—see: HopsH; GregG and TD. also see: Karl Marx, Chairman Mao: Vladimir Lenin, Ho Chi Mehn, Che, Howard Monroe and Barrack Hussien Obama

  • CaptainQ

    And just wait till next year, Hoppy! With the new taxes that will come from Charleston in 2015, Tax Freedom Day will fall further in the
    year, maybe even in MAY for WV.

    Between the increased expenses of ObamaCare the state will have to pay and the growing budget shortfall, we taxpayers are going to REALLY get fleeced in the future. Be sure to thank Obama and the WV State Democrats when you're shelling out more money to pay those higher taxes too!