It’s Tax Freedom Day in Texas
Apr 11, 2014 by AFP
Tax Freedom Day is the day when the nation as a whole has earned enough money to pay its total tax bill for year. That represents the day our earnings are available to us for food, clothing, shelter and other family budget items like health care and medicine.
Most taxpayers are surprised – and disgusted – to know that their taxes exceed what most Americans spend on food, clothing and shelter combined.
As the nation’s taxpayers file their tax returns by April 15, many have not worked long enough in 2014 to have paid all their federal, state and local taxes – even if every penny they earned went directly to pay their tax bills and nothing else. National Tax Freedom Day is April 21.
If we include this annual federal borrowing, which represents future taxes owed, National Tax Freedom Day would occur on May 6, 2014.
We in Texas fare better than most of the nation’s taxpayers. Texans work until April 13to pay the taxman.
While higher-income and higher-tax states celebrate Tax Freedom Day later: Connecticut (May 9), New Jersey (May 9), and New York (May 4), residents of Louisiana will bear the lowest average tax burden in 2014, with Tax Freedom Day arriving for them on March 30. Also early are Mississippi (April 2) and South Dakota (April 4).
Tax Freedom Day news is brought to us by our friends at the Tax Foundation.
Here are 20 “Tax Facts” just for your reading enjoyment…
1. The word tax comes from the Latin taxo, meaning “I estimate.” So, if you get audited, just tell the IRS you were “estimating” your income.
2. Tax day was originally March 1st, but it was eventually moved to April 15th so that the government could hold on to your money longer.
3. In 1923, the average American worked a total of 35 days to pay their taxes.
4. In 2013, it took 108 days.
5. The first income tax in the U.S was imposed in 1862 to help pay for the Civil War. The tax was repealed after the war.
6. The current income tax system started in 1913, following the 16th Amendment to the U.S. Constitution.
7. The IRS is the world’s largest accounting and tax-collection organization, collecting over $2.4 trillion every tax year from over 230 million tax returns.
8. The wealthiest 1% of Americans pay 37% of all income taxes.
9. The top 10% pay 70%
10. The bottom 50% pay less than 3%. (Please do not read this as “the bottom 50% do not pay taxes.” The income tax is not the only tax.)
11. The US has the highest statutory corporate tax rate in the developed world. It’s nearly 60% higher than the average country.
12. The states with the HIGHEST total tax burdens are: (1) New York, (2) New Jersey, (3) Connecticut, (4) California, and (5) Wisconsin.
13. The states with the LOWEST total tax burdens are: (1) Wyoming, (2) Alaska, (3) South Dakota, (4) Texas, and (5) Louisiana.
14. The tax code forces Americans to spend over $168 billion and 6 billion hours to comply.
15. The US Tax code is now nearly 74,000 pages long. That’s about 185 times longer than it was in 1913, when the code was 400 pages.
16. Put another way, the tax code contains nearly 4 million words. That’s 4 times longer than Shakespeare’s completed works at 900,000 words.
17. Milton Friedman helped to create the payroll withholding system as an emergency measure during WWII. He was appalled when the government made it a permanent part of its peacetime taxation.
18. 2/3 of the countries in Europe pay taxes in order watch television (e.g. UK citizens are taxed $244 a year to pay for the BBC).
19. In 2001, Russia passed a 13% flat tax and revenue increased 26%. However, they also have a value added tax (VAT), which generates most of their national tax revenue.
20. Traffic accidents increase significantly on or around April 15th, so maybe you should stay home and file from your computer.
Texas’s 2014 Business Tax Climate Index Ranks 11
How does our state’s tax system compare to other states? While we’d like to be Number One, Texas ranks 11th in the Tax Foundation’s State Business Tax Climate Index. While we have no business (or personal) income tax, Texas does impose a gross receipts tax on businesses. The Tax Foundation compares the states in five areas of taxation that impact business: corporate taxes, individual income taxes, sales taxes, unemployment insurance taxes, and taxes on property, including residential and commercial property. The ranks of neighboring states are as follows: New Mexico, 38th, Oklahoma, 36th, Arkansas, 35th, and Louisiana, 33rd.