Do your pockets feel a bit heavier today? Perhaps you’ve noticed a few more coins jingling in your change purse?
It’s not your imagination. Today, April 21, marks the first day of the year that we get to keep the money we’ve earned for ourselves instead of it going to pay federal, state, and local taxes. That means Americans have worked 111 days (since Jan. 1), just to pay for the government.
The Tax Foundation, who determines when Tax Freedom Day falls each year, estimates that Americans will pay $3 trillion in federal taxes and $1.5 trillion in state taxes, for a total tax bill of $4.5 trillion, or 30.2% of the nation’s income, which is more than Americans will spend on food, clothing, and housing combined this year.
Tax Freedom Day is three days later this year than last year (Tax Freedom Day fell on April 18 in 2013), mainly because of “the country’s continued slow economic recovery, which is expected to boost tax revenue especially from the corporate, payroll, and individual income tax,” reported the Tax Foundation.
Because each state has different levels of taxation, you might have already celebrated your personal Tax Freedom Day if you live in Louisiana, Mississippi or South Dakota. But if you live in New Jersey, New York or Connecticut, you must wait until May to begin working for yourself and not the government.