National Tax Freedom Day, the day the nation finally pays off its total tax bill for the year, hits on April 21, 2014.
It’ll take us 111 days to appease Uncle Sam this year.
Well, it’s even worse for folks living in Connecticut and New Jersey.
When you factor in state taxes, those residents won’t be free until May 9.
The earliest Tax Freedom Day was in Louisiana this year (March 30), followed by Mississippi (April 2) and South Dakota (April 4).
The only good news? I’m hearing some “Beltway” chatter that there’s relief in sight!
So I asked Capitol Hill Daily’s Chief Political Analyst, Floyd Brown, to give us the scoop.
~Robert Williams, Founder, Wall Street Daily
Before founding Wall Street Daily in the teeth of the Financial Crisis, Robert Williams served as the lead financial analyst for a Forbes top-50 private corporation and an analyst for the endowment of a major academic institution.
Will Rogers famously said, “Be thankful we’re not getting all the government we’re paying for.”
Like most Americans, Rogers understood that it isn’t cheap to live in the United States. And he wasn’t talking about the cost of living… He was talking about the cost of government.
Today, Americans spend more of their hard-earned dollars on government than they do on food, housing and clothing – combined.
Indeed, we’re paying more money to the government than at any time in our history! We know this because, each year, the Tax Foundation releases a report chronicling what we all pay.
The report also identifies “Tax Freedom Day,” the day that Americans have theoretically made enough money to cover their tax obligations for the year.
To pinpoint Tax Freedom Day, the Tax Foundation divides all federal, state and local taxes by the nation’s income. In 2014, Americans will pay $3 trillion in federal taxes and $1.5 trillion in state taxes, for a total tax bill of $4.5 trillion, or 30.2% of gross income.
This year, Tax Freedom Day will be April 21. So Americans have to work a total of 111 days before they can take home a penny for themselves or their families.
Running Up the Tab on America
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Now, it hasn’t always been this way.
The tax burden really didn’t mushroom until World War I. In 1917, Tax Freedom Day was January 24. But following the First World War, Tax Freedom Day moved all the way back to February 22.
Sadly, it’s only moved further down the calendar since then.
During the Depression, Franklin Roosevelt significantly boosted taxes. And then he bumped them up again during World War II. By the end of 1943, Tax Freedom Day moved into April. Yet even after the war, taxes never really went down.
Today, the situation has become grave.
Consider: In 1755, it’s likely that the average slave consumed 75% of what he or she produced, with the balance of 25% going to his or her master. By comparison, we don’t even reap 75% of what we earn.
So it’s fair to say that we’re currently in an abusive form of servitude.
In fact, abolitionist activists at FreeTheSlaves.net say, “When a situation of extreme exploitation is examined, it is important to ask: Can this person walk away?”
Well, do we have the ability to walk away from these payments?
New Tax Plan Offers a Ray of Hope
With the IRS abuse scandal raging on Capitol Hill, some Congressmen are admitting that the IRS can’t be reformed… so, instead, it must be abolished.
Their solution is to implement a Fair Tax that would be levied not on what you produce, but on what you consume. If you save and invest, you won’t be taxed for your responsible behavior. But if you live beyond your means – buying houses, boats and vacations you can’t afford – your irresponsible behavior would, indeed, be taxed.
As Jack Kemp always said, “When you tax something, you get less of it – and when you reward something, you get more of it.”
I say we tax spendthrift behavior – while rewarding those who save, invest and generally prove to be responsible citizens.
It would turn our economy around in a heartbeat.
Your eyes on the Hill,