Tax Freedom Day Debunked -- Again

[Joe Steel]

As it does every year, the Center on Budget and Policy Priorities has debunked the Tax Foundation's "Tax Freedom Day."

Tax Freedom Day is a myth. Don't believe it.

Each year, the Tax Foundation releases a report projecting “Tax Freedom Day,” which it describes as the day when Americans will have “earned enough money to pay this year’s tax obligations at the federal, state, and local levels.”[1]

The Tax Foundation’s “Tax Freedom Day” report is plagued by two major problems. First, its estimates of state and local tax burdens suffer from a number of serious methodological flaws (see the box on page 4). Second, over the years, many journalists and policymakers have misinterpreted the Tax Foundation’s report as reflecting the tax burdens faced by typical middle-income workers.

In fact, the Tax Foundation’s calculation of the “average” tax burden merely measures tax revenues as a share of the economy; it is similar to estimates of total revenues as a share of Gross Domestic Product (GDP). In a progressive tax system like that of the United States, only upper-income households pay tax at rates equal to or exceeding the overall level of revenues as a share of the economy. Authoritative figures from the non-partisan Congressional Budget Office show that middle- and even upper-middle-income Americans pay a considerably smaller share of their income in taxes than the Tax Foundation report implies. The CBO data suggest that 80 percent of U.S. households pay federal tax at a lower rate than the Tax Foundation’s estimated “average” federal tax burden.

The Tax Foundation itself acknowledges this issue in a methodology paper accompanying its report, pointing out that its estimates reflect the “average tax burden for the economy as a whole, rather than for specific subgroups of taxpayers.”[2] Journalists and others who report on “Tax Freedom Day” as if it represented the day until which the typical or average American must work to pay his or her taxes are misinterpreting these figures and inadvertently fostering misimpressions about the level of taxes most Americans pay.

Tax Foundation Figures Do Not Represent Typical Households’ Tax Burdens

 

[Skull Pilot]

yeah don't believe it at all

You don't really pay any taxes

 

[martybegan]

There is a day somewhere when you earn the amount you pay in taxes. Methodology arguments aside.

 

[chanel]

Of course there is. But even if its only the top earners, they should still be recognized. Thank you top earners for contributing more than your "fair share" 100 days of working for free so some junkie doesn't have to is worthy of a day of recognition.

 

[xsited1]

Tax Freedom Day Debunked -- Again

Isn't that the truth! We've got a legion of Entitlement Generation families who pay a net ZERO in taxes. Their tax freedom day begins on January 1st, all thanks to hard-working people who have to cover for them. And each year the Entitlement Generation gets a little bigger, moving it ever closer to an unsustainable position. Of course, there are still people who believe in the Free Lunch concept, that is until everything comes crashing down.

 

[Joe Steel]

There is a day somewhere when you earn the amount you pay in taxes. Methodology arguments aside.

Sure but deliberately misrepresenting it is deceitful and counter-productive. Overstating the level of taxes we pay creates an antipathy toward taxation which diminishes government's ability to raise revenue for the services we expect of it.

 

[DiamondDave]

It is a day shown merely as an example to show the absurdity of the tax rate for actual earners...

We know full well that loser stoner morons, living in mom's basement, smoking weed, and having cheetos dust coatings on their small little dicks from beating of to naked pictures of Pelosi, pay no taxes... it's how them Dems buy their votes

 

[CrusaderFrank]

I remember when I got my first paycheck from EF Hutton. I had mentally computed what I thought I would get and the check was only 2/3 of the amount. WTF!?!?! Federal, State, local and SocSecurity grabbed 1/3 and they did none of my work those 2 weeks.

 

[martybegan]

Not liking the date they get with thier methodology does not make it debunked. I'm sure you can find plenty of people who have a tax freedom day of april 9th, just as there are plenty of people with a date before or after.

April 9th means a tax rate of around 27%. That seems pretty average to me factoring in federal,state local taxes of all types.

 

[chanel]

Yes I imagine there are some in the top 5 percent that will be working til June next year when they are tapped further for the stimulus the HC bill and of course when the states run out of cash - which is happening right now. And something tells me that the 5 percent may be shrinking. Who will they go after next?

 

[editec]

All I know is that I pay a much larger share of my income as taxes than Exxon does.

And I won't be paying any FEDERAL income taxes, this year, either.

I will be paying taxes disguised as fees, sales taxes, taxes on communications, real estate taxes taxes on cigarettes, junk food taxes, resturant taxes taxes on gas and fuel, and so on and so on and so on.

Ain't NOBODY in this world who buys or sells anything that isn't paying taxes.

Not welfare mothers not CEOs of major corporations, either.

We ALL pay taxes.

 

[Darkwind]

With news of this administration looking to add 20% VAT and taxing carbon to the tune of 5% to 25% it is not surprising that a post like this is made. Those who support government intrusion into the lives of the citizenry will, at all costs, attempt to refute that you pay a significant amount of taxes.

Witness a report that says your tax liability is X number of dollars. You have to work Y number of days to reach that magical number X.

There is nothing flawed with that methodology in any way. It is just a simple fact of life. What must be hidden and smeared and slandered is the total dollar amount.

If people understood how much they are taxed, they would rise up and revolt.

 

[xsited1]

All I know is that I pay a much larger share of my income as taxes than Exxon does.

And I won't be paying any FEDERAL income taxes, this year, either.

I will be paying taxes disguised as fees, sales taxes, taxes on communications, real estate taxes taxes on cigarettes, junk food taxes, resturant taxes taxes on gas and fuel, and so on and so on and so on.

Ain't NOBODY in this world who buys or sells anything that isn't paying taxes.

Not welfare mothers not CEOs of major corporations, either.

We ALL pay taxes.

Obviously we all pay taxes, but some of us (not me) get a huge return from the Federal Government offsetting any taxes paid. This is true of most welfare mothers, and is generally not true of CEOs of major corporations.

So you won't be paying Federal Income taxes this year? Slacker!

 

[amrchaos]

I have a methodology that you can apply to yourself!!

First, calculate the percentage of your income you pay in taxes

Next, calculate the number of days you work

Now multiply the percentage to the number of days, the amount left is the amount of days you need to work befor you are free from your tax burden!

Now take out a calender and count off the work days until you reach your calculated number! That is the last full day of your tax burden. But most of you will have a percentage, so the next day will be your personal "Tax Freedom day"!!

Happy Tax Freedom Day!!
whenever that is​

 

[NYcarbineer]

If you work directly or indirectly for the government, your tax freedom day is January 1st, since without taxes your job wouldn't exist. Police, teachers, military, people who work in defense plants, etc. When you pay your taxes, you're just gving the people who pay your entire salary some of the money back.

This also applies partially to anyone who does business with anyone who gets all or part of their income from taxes.

 

[Skull Pilot]

I have a methodology that you can apply to yourself!!

First, calculate the percentage of your income you pay in taxes

Next, calculate the number of days you work

Now multiply the percentage to the number of days, the amount left is the amount of days you need to work befor you are free from your tax burden!

Now take out a calender and count off the work days until you reach your calculated number! That is the last full day of your tax burden. But most of you will have a percentage, so the next day will be your personal "Tax Freedom day"!!

Happy Tax Freedom Day!!
whenever that is​

And remember to include ALL taxes you pay not just income tax.