A tax advocacy group on Wednesday revealed that Americans spend more on taxes than their whole budget for food, clothing and housing.
The Tax Foundation, in its annual report on when the nation as a whole has earned enough to pay its taxes, announced the date as April 24.
“Tax Freedom Day gives us a vivid representation of how much federal, state, and local tax revenue is collected each year to pay for government goods and services,” said Tax Foundation Analyst Scott Greenberg. “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. Tax Freedom Day helps people relate to that cost.”
The report’s key findings include:
— Collectively, Americans will spend more on taxes in 2016 than they will on food, clothing, and housing combined.
— 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.
— Tax Freedom Day is one day earlier than last year, due mainly to the Protecting America from Tax Hikes Act of 2015, which made several business and individual tax cuts permanent.
— If you include annual federal borrowing, which represents future taxes owed, Tax Freedom Day would occur 16 days later on May 10.