The average American will work until April 18 this year to pay off his or her total tax burden, says the Tax Foundation in its annual report
. That’s five days later than in 2012.
To blame for those extra five days of taxes: the fiscal cliff deal, Obamacare, and a continued slow recovery.
Americans will pay a total of $4.22 trillion in federal and state taxes this year, the nonpartisan, nonprofit group said. That amounts to 29.4 percent of income. The group named April 18 Tax Freedom Day because that date is 29.4 percent of the way into the year.
The fiscal cliff deal reached by Congress on Jan. 1 and signed by President Barack Obama the next day is the main culprit for higher taxes, the Tax Foundation website says. The deal had the effect of raising federal taxes on individual income and payroll.
The Affordable Care Act’s investment tax and excise tax added to the burden, the group says. “Finally, despite these tax increases, the economy is expected to continue its slow recovery, boosting profits, incomes, and tax revenues.”
Tax Freedom Day is even later when the federal deficit is included. Add those figures, and you’ll have to work 21 more days, until May 9, to pay off your tax bill.
The Tax Foundation’s economists calculated Tax Freedom Day for each state and found Connecticut to have the latest date at May 13. Mississippi and Louisiana tied for the earliest date: March 29.
Taxes at all levels of government are included, the Tax Foundation said, “whether levied by Uncle Sam or state and local governments.”
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