Some taxing thoughts
Tax Day 2014 has arrived and you’ll have to be sending in those returns with payments or seeking an extension today.
It’s also the day after Tax Freedom Day in Ohio, and five days after Tax Freedom Day in West Virginia. Both states are well ahead of the national Tax Freedom date, which happens Monday.
Tax Freedom Day is calculated by the Tax Foundation, a nonpartisan think tank based in Washington that was founded in 1937. It researches and informs citizens and government about tax policies.
Tax Freedom Day is the date upon which all of the nation’s taxes would be paid for the full year (if all the wages earned were going solely into taxes first). The calculation is made by dividing all the local, state and federal taxes by the nation’s income.
The Tax Foundation said Tax Freedom Day this year for the nation is three days later than it was in 2013. If federal borrowing is included, tax freedom day will fall on May 6, some 15 days later than last year.
The non-borrowing tax freedom day has slid this year largely because of the slow pace of the recovery, meaning wages are taking a little longer to come in to meet the tax demands.
In higher income, higher taxed states, wage-earners work for government longer. Tax Freedom Day comes in New Jersey and Connecticut on May 9, for example, while the lowest average tax burden falls to Louisiana, which sets its wage earners free on March 30.
Taxes as a take balanced against income were at their longest period in 2000, when Tax Freedom Day occurred May 1.
But in 1900, more than a decade before the federal government established an income tax, tax freedom day occurred in January.
Tax Freedom day slipped further into the year as the Great Depression and World War II, the inflation of the late 20th century and the explosion in government programs took place. In 2009, thanks to tax cuts seeking to stimulate the economy in the Great Recession, tax freedom day moved back to April 10, the earliest since the mid-1960s. Those cuts expired and taxes increased in 2013.
It’s all something to ponder as you file those returns today. At least, if you were paying everything in 2014 in one lump sum, you’d be working for yourselves in Ohio and West Virginia now.