A lot of our earnings go to taxes at many levels
Tax Freedom Day 2014, which was this past Monday, came and went with little fanfare. In fact, most Americans were unaware that it was a day worth noting.
Tax Freedom Day is the day on which Americans have collectively earned enough money to pay off the country’s total federal, state and local tax bill.
This year, Americans will pay about $3 trillion in federal taxes and another $1.5 trillion in state and local taxes. That is $4.5 trillion in taxes in 2014, about 30 percent of the nation’s total income.
Tax Freedom Day for Tennesseans comes a little earlier than the nation’s — April 5.
While Tennessee does not have an income tax, its residents pay dearly in sales taxes — among the highest in the nation at 7 percent. With local taxes, the total sales tax is between 8.5 and 9.75 percent. Food in Tennessee is taxed at 5 percent plus any local taxes.
According to the Tax Foundation, federal income taxes eat up 33 days, taking the typical taxpayer from January into early February to earn enough to pay in full.
Social Security taxes are the next largest cost paid by American workers, requiring 27 days to pay up.
After that, it’s sales and excise taxes (13 days), property taxes (11 days), state and local income taxes (nine days), federal corporate taxes (eight days) and 10 more days for a variety of other taxes.
All that adds up to 111 days of earnings needed to fulfill a citizen’s obligations.
Now that your taxes to Uncle Sam are taken care of, you can start thinking about how you’ll spend the remaining 75 percent of your earnings in 2014. Like most Americans, you probably already know — mortgage and car payments, college and retirement savings, food, clothing, repair bills, and cable TV and Internet fees.
Freedom has its price. Taxes feed the services that citizens often expect or demand.
Our taxes help to make our modern standard of living possible. Tax money builds roads, pays police, pays for our VA hospitals and the salaries of America’s servicemen, jails criminals, maintains our parks, teaches children, and covers a host of other functions that we just can’t provide by ourselves. In the 1920s Justice Oliver Wendell Holmes described taxes as the price of civilized society. At that time Tax Freedom Day was arriving in February.
In all, we pay a lot of taxes, and yes, we gripe about it. But by many measures we get a decent return.
Still, think what a difference it would make in our households and our nation’s economy if we could keep a bit more of what we earn, rather than giving away so much of it in taxes.
However justifiable, taxes are still a burden.
It’s not the government spending we object to; it’s the waste and fraud in government spending that force us to work longer for the government and less for ourselves.