Utahns will see a rare convergence of three types of “tax days” on April 17.
That is when income taxes are due (later than the usual April 15 because of a weekend and a Washington, D.C., holiday). It will also be both the state and national “Tax Freedom Day,” when typical taxpayers would have earned enough to pay off their federal, state and local tax bills if they had spent all their income on nothing else all year.
“Americans spend more on taxes than they do on food, clothing and housing combined,” said William McBride, an economist for the Tax Foundation, a nonpartisan research group, which announced Monday when Tax Freedom Day will be for the nation and each state.
Utahns this year have the same Tax Freedom Day as the nation as a whole, April 17, McBride said, meaning they will work 107 of 365 days a year (not counting leap day) to pay their varied taxes.
He figured that Utahns have the 17th highest overall tax burden among the states, but they match the overall national average.
Tennessee has the earliest Tax Freedom Day, on March 31, enjoying the nation’s lowest average tax burden this year. Connecticut has the latest Tax Freedom Day: May 5.
McBride said this year’s national Tax Freedom Day is four days later than in 2011. That’s mostly because people and corporations are making more money as the nation recovers from the recession, he said, so they are paying more income taxes on those higher earnings.
“This year, Americans will pay $2.62 trillion in federal taxes and $1.42 trillion in state and local taxes, which comes to 29.2 percent of total income,” McBride said.
On a calendar basis, McBride said, Americans work 49 days for all income taxes; 23 days to pay social insurance taxes; 15 days to pay sales and excise taxes; 12 days for state and local property taxes; and eight days for other taxes such as car taxes, severance taxes on minerals and estate taxes.
The federal tax burden is about twice the size of the state and local tax bill.
“It takes 69 days to pay the federal tax burden, and 38 days to pay the state and local tax burden,” McBride said. “All 50 states and localities combined are about half the size of the federal tax burden.”
McBride said that if the federal government raised taxes enough to close the budget deficit — another $1.014 trillion — Tax Freedom Day nationally would come on May 14 instead of April 17.
He said the latest-ever Tax Freedom Day was in 2000 on May 1, meaning Americans that year paid 33 percent of their income on taxes that year. A century earlier, in 1900, Tax Freedom Day came on Jan. 22, when Americans paid 5.9 percent of their income in taxes.
McBride said Tax Freedom Day would have been three days later this year, except that Congress extended for this year an earlier 2 percent cut in social insurance taxes.
Tax Day is also Tax Freedom Day
Income taxes are due April 17 this year, which is also ‘Tax Freedom Day’ nationally and in Utah — when typical taxpayers would have earned enough to pay all their taxes if they spent income on nothing else. Here is how long it takes to pay off various types of taxes this year:
49 days • Income taxes.
23 days • Social insurance taxes.
15 days • Sales and excise taxes.
12 days • Property taxes
8 days • Other taxes (such as car, severance and estate taxes).