That's not exactly a reason to celebrate, since 42 other states and the nation as a whole have already has their tax freedom day. Among the six states remaining are New Jersey (May 9), Connecticut (May 9), and New York (May 4). Illinois has the latest tax freedom day in the midwest.
Some facts about your taxes from the Tax Foundation.
- The national Tax Freedom Day is three days later than last year due mainly to the continuing economic recovery, which will boost federal tax revenue collected through the corporate, payroll, and individual income tax.
- Americans will spend more on taxes in 2014 than they will on food, clothing, and housing combined.
- Americans will spend 42 days working to pay off income taxes, 15 days for excise taxes, and 11 days for property taxes.
- Americans will pay $3 trillion in federal taxes and $1.5 trillion in state and local taxes, for a total bill of more than $4.5 trillion, or 30.2 percent of the nation's income.
- If you include annual federal borrowing, which represents future taxes owed, Tax Freedom Day would occur on May 6, 15 days later.
The Tax Foundation believes Tax Freedom Day is a significant date for taxpayers and lawmakers because it represents how long Americans as a whole have to work in order to pay the nation's tax burden. "Arguments can be made for why the collective tax bill is too high or too low, but in order to have an honest discussion, it's important to understand where we stand," said Tax Foundation Economist Kyle Pomerleau in a news release. "Tax Freedom Day gives us a vivid representation of how much we pay for the goods and services provided by governments at all levels."
Illinois is approaching an important milestone in its tax structure. The state's temporary income tax increase is set to expire at the end of the year, lowering individual income taxes from 5% to 3.75% and eventually 3.25%. Governor Quinn has proposed making the temporary tax hike permanent at 5%, while others are pushing the idea of a progressive income tax which would push Tax Freedom Day back even further for state taxpayers, but would also set the rate at 4.9% for those making between $12,000 and $180,000, which is slightly less than the 5% tax rate they currently pay.
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