Happy Tax Freedom Day! But not you, Minnesota…
Today, April 19th, is national Tax Freedom Day. Until now, on average, every time an American worker has got out of bed and gone to work, every clock they’ve punched, they’ve done it for the government. The pay they’ve received for the 109 days of the year to date has all been taken by the taxman.
Happily, national Tax Freedom Day falls three days earlier this year than it did in 2017. This is due, in large part, to the recent federal tax law, the Tax Cuts and Jobs Act, which significantly lowered federal individual and corporate income taxes.
Not so fast…
Even so, Americans will pay $3.4 trillion in federal taxes and $1.8 trillion in state and local taxes in 2018, for a total bill of $5.2 trillion. This amounts to 30% of the nation’s income. It is $26,198 per household. Americans will collectively spend more on taxes in 2018 than they will on food, clothing, and housing combined.
But, just as I used to kill parties by playing Freebird, I also have a little rain for this parade. Even with this vast income, the federal government plans on spending $33,054 per household this year. The balance, $6,856 per household, will be borrowed, bringing the total national debt to nearly $170,000 per household. Federal spending has soared by more than $5,000 per household since 2007 and is projected to rise by another $9,000 over the next decade. The federal government is writing checks the nation’s taxpayers can’t cash.
Your name isn’t down, Minnesota
But it isn’t Tax Freedom Day in Minnesota. Because of our state’s high tax rates, a few more of those early mornings and long commutes will have to be done before the taxman has extracted his tribute. I’ll let you know when Minnesota has its own Tax Freedom Day, but between now and then, every time you look at the alarm clock and realize you can’t hit ‘Snooze’ again and every time you’re sat in traffic, remember, that’s the price of Big Government.
John Phelan is an economist at the Center of the American Experiment.