Taxpayers will have a reason to celebrate later this month. According to the Tax Foundation, this year’s Tax Freedom Day® falls on April 24. On that date, the nation as a whole will have earned enough to pay the total federal, state and local tax bills for the year.
“Arguments can be made that the tax bill is too high or too low, but in order to have an honest discussion, it’s important for taxpayers to understand the cost of government,” said Tax Foundation Analyst Scott Greenberg. “Tax Freedom Day helps people relate to that cost.”
Of the 114 “taxed” days, Americans will work 46 days to pay individual income taxes (federal, state and local) and 26 days to pay payroll taxes. Sales and excise taxes, corporate income taxes, property taxes, estate and inheritance taxes, customs duties and other taxes account for the remaining days.
Here are some additional, tax-related facts from the Tax Foundation’s website:
• Americans will pay $3.3 trillion in federal taxes and $1.6 trillion in state and local taxes, for a total bill of almost $5.0 trillion, or 31 percent of the nation’s income.
• Americans will collectively spend more on taxes in 2016 than they will on food, clothing and housing combined.
• In calendar year 2016, the deficit will grow significantly, from $592 billion to $698 billion. If we include this annual federal borrowing, which represents future taxes owed, Tax Freedom Day would occur 16 days later on May 10.
Historically, the latest national Tax Freedom Day was May 1, 2000, when Americans paid 33 percent of their income in taxes. A hundred years earlier, Americans paid 5.9 percent in taxes, resulting in a Tax Freedom Day on Jan. 22. Because of our progressive federal tax system and varied state tax policies, residents in different states bear disparate tax burdens. Mississippi, Tennessee and Louisiana have the earliest state Tax Freedom Day (April 5 – 7); New York, New Jersey and Connecticut have the latest (May 11, 12 and 21).
Concerned about current or prospective tax bills? We’d be happy to work with your accountant to evaluate your present tax situation, analyze future scenarios and make recommendations to position your portfolio to reduce your tax liability. Call Jordan Dechtman, Denver wealth manager at 303-741-9772, email him at Jordan@JordanDechtman.com or visit our website www.JordanDechtman.com to schedule an appointment.
Important Disclosure Information
Please remember that past performance may not be indicative of future results. Different types of investments involve varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy, or product (including the investments and/or investment strategies recommended or undertaken by Dechtman Wealth Management, LLC [“DWM”]), or any non-investment related content, made reference to directly or indirectly in this blog will be profitable, equal any corresponding indicated historical performance level(s), be suitable for your portfolio or individual situation, or prove successful. Due to various factors, including changing market conditions and/or applicable laws, the content may no longer be reflective of current opinions or positions. Moreover, you should not assume that any discussion or information contained in this blog serves as the receipt of, or as a substitute for, personalized investment advice from DWM. To the extent that a reader has any questions regarding the applicability of any specific issue discussed above to his/her individual situation, he/she is encouraged to consult with the professional advisor of his/her choosing. DWM is neither a law firm nor a certified public accounting firm and no portion of the blog content should be construed as legal or accounting advice. A copy of the DWM’s current written disclosure Brochure discussing our advisory services and fees is available for review upon request or at www.dechtmanwealth.com.
Please Note: DWM does not make any representations or warranties as to the accuracy, timeliness, suitability, completeness, or relevance of any information prepared by any unaffiliated third party, whether linked to DWM’s web site or blog or incorporated herein, and takes no responsibility for any such content. All such information is provided solely for convenience purposes only and all users thereof should be guided accordingly.
Please Remember: If you are a DWM client, please contact DWM, in writing, if there are any changes in your personal/financial situation or investment objectives for the purpose of reviewing/evaluating/revising our previous recommendations and/or services, or if you would like to impose, add, or to modify any reasonable restrictions to our investment advisory services. Unless, and until, you notify us, in writing, to the contrary, we shall continue to provide services as we do currently.
Please Also Remember to advise us if you have not been receiving account statements (at least quarterly) from the account custodian.
Join our newsletter
"*" indicates required fields