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Tax Freedom day

Definition

This is the day of the year that American workers finally pay off the government so that they can begin to keep the fruits of their production.  It is calculated by assuming that everyone in America starts working on 1 January for 8 hours a day, five days a week.  This is a measure that is calculated by The Tax Foundation, a non-profit group that looks at trends in taxation in the U.S. and makes recommendations for a better system.

Using the term Tax Freedom day :

In the past few years, this day has fallen in mid to late April of each year.  This is due to the tax cuts put in place for Americans during the Bush administration.  If the Democratically controlled congress is able to repeal these tax cuts, then expect tax freedom day to fall later in the year and you will be working for the government for a longer period of time.

Pay Special Attention To :

It should be noted that the basis for this calculation attempts to include all relevant taxes for the average American so it includes income taxes, (state and federal), medicare, and sales taxes.  Interestingly, Americans have recently voted with less regard to tax policy and how it might affect their family's ability to save personal funds.  Logically, this would lead an outsider to assume that Americans feel that the government does a better job spending their money than they in fact can.  This is not the historical belief or tradition of Americans, so we will see if the majority continues to believe the govenment is the best decision maker when it comes to spending the tax payer's money.

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Related terms

 taxes