Every year, as a way to emphasize how terribly much Americans pay in taxes, our friends over at the Tax Foundation publish a report, based on volumes of published US government data, in which they have calculated the date on which the average US taxpayer has worked long enough, to earn enough money, to pay all of his taxes for that year. For obvious reasons, the Tax Foundation refers to this date as, Tax Freedom Day.
OK. In reality, your taxes are spread out over the year. But by putting a date on when you've worked long enough to pay your taxes for the year, it makes it easier to understand just how much of your hard work benefits the government, instead of you.
In 2014, the Tax Foundation calculates that Tax Freedom Day will arrive on April 21. That's 3 days later than last year. So what this means is that you will have to work 3 days longer this year, to pay your taxes, than you did last year. The Tax Foundation attributes this additional tax load to the slow economic recovery. (For the record, last year you had to work 5 days more than the year before, to pay your taxes.)
We must commend the Tax Foundation for doing a yeoman's job, in preparing this report. Just for the sake understanding what goes into this calculation, we once went through one of their reports and tried to trace what went into that calculation. Just following their work took days. But in doing so, we were also able to determine that they have been exceedingly thorough in their work. We're glad that someone else has taken it upon themselves to do this work.
As a way to help you better visualize what Tax Freedom Day really means for you, Allegiance Books has used the Tax Foundation report to create the Tax Freedom Clock, as a Flash web widget that can be embedded on any website and on many forums. We have also taken Tax Freedom Day to a more granular level, with the Tax Freedom Clock. Using the Tax Foundation data, we've calculated the moment of Tax Freedom, down to the second.
Using the Tax Foundation's determination that taxes of Americans represent 30.2% of total income for Americans, we determined that the exact moment of Tax Freedom is April 21 at 5:31:12 AM. This lets the Tax Freedom Clock count down to the second.
Some have suggested that since the Tax Freedom Clock counts down not just to the day of Tax Freedom, but to the second, it constitutes cruel and unusual punishment, by emphasizing the pain of our tax load, with each tick. But then, isn't that what the income tax has evolved into… cruel and unusual punishment? What else can you call it, when our various government bodies demand that their producers work more than a quarter of each year for them, before those producers can start earning their own money?
The Tax Freedom Day Clock web widget not only counts down the time till the next US Tax Freedom Day, but after Tax Freedom Day has passed, it tells the time that most Americans have actually been earning their own money, since Tax Freedom Day.
Note that if you have visited any page that contains this clock within a week of April 7, when the clock was updated, you may have to refresh your browser or in some cases, clear cache in your browser and then refresh the page, to see the correct time for 2014.
It's a Flash applet, so it should work on any web site or blog that allows web widgets (object code or embed code) and display properly on all modern browsers.
Sorry, but Flash doesn't work on iPhones or iPads. But on the positive side, we just bought an iPhone development course, so an iPhone app may be on the horizon. No promises, yet. But we're considering it.
We have also had some success at developing an HTML5 version of a similar widget. However, we've found that due to the nature of the underlying code of such a widget, it's not as easy to embed on another site. So we have shelved an HTML5 version till that issue with HTML5 is resolved.
Allegiance Books encourages you to share this widget with your friends, by placing it on your own web site, on social networking sites and in the signature area of your various forum postings.
You can find the widget, along with the code and instructions for placing it on your website, forum postings, or social media page at http://therichdontpaytax.com/blog/?page_id=205
The underlying data that makes the US Tax Freedom Clock possible comes from annual calculations by the non-partisan Tax Foundation, who are the official keepers of the US Tax Freedom Day.
The Tax Foundation uses the most unbiased method possible for calculating the national Tax Freedom Day. As you can see below, it is very straight forward:
Federal State and Local Taxes
------------------------------------- X 365 (or 366) days = Days to Tax Freedom Day
Total of all US Income
Dividing the total of federal, state and local taxes, by the total income of all Americans, gives us the percentage of our annual income that goes to taxes and likewise the percentage of the year that we have to work for the government to pay those taxes. Take that percentage and multiply it by the number of days in the year and you know how many days you have to work to pay your taxes for that year.
In the past, some people have suggested that Tax Freedom Day is not really representative of most working Americans, since it is skewed by the the large amount of taxes paid by the very rich. They try to spin the story that that the average taxpayer doesn't really work that long, by ignoring other even more significant facts. But that's all their argument is - spin. Not only does that argument have no basis in fact, but if Tax Freedom Day is off at all, it's probably off in the other direction.
You see, like most spin, the argument of the detractors focuses on just one point that is part of a much larger picture and, by itself, would tend to support their position. But in order to make their spin work, they completely ignore the fact that roughly half of Americans pay zero income tax and very little of any other taxes. They want us to forget that important fact, because they know that it more than offsets the effect of a handful of the rich paying huge amounts of tax. In the end, Tax Freedom Day is very representative of the average working American and may actually be skewed ever so slightly toward lower-income taxpayers. Because of this, there is a very good likelihood that your personal tax freedom day could be later than the one calculated by the Tax Foundation.
We hope that you will use the Tax Freedom Day Clock web widget on your site and tell others about it, to help emphasize how much of our work actually benefits the government and not those of us who worked to earn it.
Also, please visit the Tax Foundation for more information on Tax Freedom Day.