On April 16 the average American will have finally worked enough to pay off their taxes for the year, according to the Tax Foundation, which keeps track of when Tax Freedom Day is achieved each year.
In Montana, Tax Freedom Day for 2019 came on April 6, the eighth earliest day in the country. Alaska achieved Tax Freedom Day first this year, on March 25. New York will be the latest on May 3.
Americans will collectively spend more on taxes in 2019 than they will on food, clothing, and housing combined.
Tax Freedom Day is the day when the nation as a whole has earned enough money to pay its total tax bill for the year. Tax Freedom Day takes all federal, state, and local taxes and divides them by the nation’s income. In 2019, Americans will pay $3.42 trillion in federal taxes and $1.86 trillion in state and local taxes, for a total tax bill of $5.29 trillion, or 29 percent of national income. This year, Tax Freedom Day falls on April 16, or 105 days into the year.
This year, Americans will work the longest to pay federal, state, and local individual income taxes (42 days). Payroll taxes will take 26 days to pay, followed by sales and excise taxes (15 days), corporate income taxes (5 days), and property taxes (11 days). The remaining six days are spent paying estate and inheritance taxes, customs duties, and other taxes.
Since 2002, federal expenses have surpassed federal revenues, with the budget deficit exceeding $1 trillion annually from 2009 to 2012. In calendar year 2019, the deficit is expected to increase from $981 billion to $1.09 trillion. If we include this annual federal borrowing, which represents future taxes owed, Tax Freedom Day would occur on May 8, 22 days later. The latest ever deficit-inclusive Tax Freedom Day occurred during World War II, on May 25, 1945.
The latest ever Tax Freedom Day was May 1, 2000; in that year, Americans paid 33 percent of their total income in taxes. A century earlier, in 1900, Americans paid only 5.9 percent of their income in taxes, meaning that Tax Freedom Day came on January 22.