Tax Freedom Day 2013
If you live in the foothills of California it comes as no surprise Californians are over taxed. The fire tax is just one example of the Legislature’s voracious appetite for more and more of your income.
Earlier this month, the Tax Foundation released its annual “Tax Freedom Day” report, which calculates how long it takes for Americans to work off their entire tax bill in each state. In California, Tax Freedom Day falls on April 24th this year. That means you work 114 days to pay Uncle Sam and the Golden State to keep our schools, police, firefighters, hospitals, parks, roads, and prisons operating.
Tax Freedom Day is calculated by dividing the official government tally of all taxes collected in each year by the official government tally of all income earned in each year.
California has the sixth longest wait of any state to work off our tax burden. Our neighbors in Arizona reach Tax Freedom Day on April 5th, in Nevada on April 14, and people in Oregon start bringing home the bacon (or veggie burgers) on April 15. Only the residents of four states on the east coast and the state of Illinois have to work longer than Californians to pay their taxes.
Nationally, Tax Freedom Day falls on April 18th, five days later than last year. The Tax Foundation, which prepares the data annually and releases the information in March or April, explains why:
Why is Tax Freedom Day later this year?
Tax Freedom Day is five days later than last year, due mainly to the fiscal cliff deal that raised federal taxes on individual income and payroll. Additionally, the Affordable Care Act’s investment tax and excise tax went into effect. Finally, despite these tax increases, the economy is expected to continue its slow recovery, boosting profits, incomes, and tax revenues.
California earned its Number Six ranking by having the highest sales and gasoline taxes in the nation, as well as the highest corporate sales tax rates in the west.
Added to that is California’s additional tax burden from 2012’s Proposition 30 which raised the sales tax by a quarter-cent for the next five years and increased the personal income tax on those earning $250,000 or more per year.
How does California’s date this year compare to previous years? In 2012 Tax Freedom Day was April 21st, and in 2011 it was April 16th.
To see rankings for all 50 states, view the report at: http://taxfoundation.org/sites/taxfoundation.org/files/docs/combinedtfd.pdf