Tax Freedom Day – Fall 2004

Hello from Sycamore,

Tax Freedom Day

I ran across some good (relatively speaking) news about taxes and wanted to share it with you. In 2004 it was estimated that, as a country, we reached Tax Freedom Day on Sunday April 11th. This is the earliest we have reached this date since 1967 and it’s 21 days earlier than in 2000. The two major reasons for the lighter tax burden are the recent tax cuts and the post recession economy that is not producing tax revenue as quickly as growth.

Tax Freedom Day is the day when all Americans have earned enough to pay off their total tax bill for the year. All income sources and all taxes (local,state & federal) are included. In addition to a Tax Freedom Day for America, there is also a Tax Freedom Day for each state. A few that may be of interest are Indiana, April 7th, Florida, April 8th, Alaska, the best at March 26th and Connecticut, the worst at April 28th.

The average American works 36 days to pay Income tax, 28 days to pay social security tax, 16 days to pay sales and excise tax, 11 days to pay property tax and 9 days to pay corporate income taxes. Somehow the corporate income tax works it’s way down to the average consumer, what a surprise!!! On average we work more days each year to pay taxes (101) than we do to provide housing and household operations (66) or food (31). Can you see the indigent at the intersection holding a sign that reads “will work for taxes.” :-)

It always seems that our taxes are far too high but historically, America has been a low tax country. In comparison, look at Great Britain, with an estimated tax freedom day of June 11th this year, or Canada who’s tax freedom day was estimated as June 27th in 2004. There are, of course countries with earlier tax freedom dates than the Unites States but these countries may not have the provided services that we have come to expect in America. While it seems that taxes are a burben,and they are, we really do receive quite a bit in return. Some examples are social security benefits (retirement, disability, etc.), medicare, public schools, business loan programs, disaster relief, college loans and grants, and, most importantly, a military that protects our way of life.

Tax freedom day was earlier this year than it has been for 37 years. Of course, we’re all looking forward to more improvement, but in the meantime we’ll take the current reductions with a smile.

Thanks for your business and trust,

Sycamore Financial Group