Tax Freedom Day Clock 2008

The Tax Freedom Day Clock

John Gaver
January 1, 2008
Updated March 26, 2008

John Gaver Each year, the Tax Foundation publishes a report, in which they have calculated the date on which the average US taxpayer has earned enough to pay all of his taxes for that year. For obvious reasons, this date is referred to as Tax Freedom Day.

To help draw attention to how much of our labors go into paying taxes, we decided to use that date, to create the Tax Freedom Day Clock that counts down the months and days till the next Tax Freedom Day or the months and days that you have actually been earning your own money, since Tax Freedom Day.

Both the clock in the title of this article and the one at the top of each page in our Tax and Economy section are live. That means that the Tax Freedom Day Clock will update not only when the page is opened, but will continue to update, as long as the page is left open. We thought about using hours and minutes in the clock, but that seemed a little much and takes up more space. However, we wanted you to be able to actually watch the Tax Freedom Day Clock count down, which is why there are three decimal places in the days. The effect is that you will see a tick approximately every minute and a half.

We find that actually watching the clock, ever so slowly count down to Tax Freedom, seems to emphasize the seriousness of the problem with our out-of-control taxes. Some have suggested that doing it that way borders on being sadistic. Our response is that it is much less sadistic than our own government demanding that we work more than a quarter of every year for them.

The Tax Freedom Day Clock will not only track the number of months and days until Tax Freedom Day, but also track how many months and days you have been working for yourself, after Tax Freedom Day passes.

It should be noted that the data used by the Tax Foundation, to calculate the next Tax Freedom Day does not become available from the Department of Commerce, Bureau of Economic Analysis (BEA) at the first of the year. So each year, until the Tax Foundation receives that data and announces Tax Freedom Day for that year, our Tax Freedom Day Clock will count down to the previous year's Tax Freedom Day.

Each year, we adjust the Tax Freedom Day Clock as soon as the Tax Foundation announces the new date. That usually occurs some time around the first of April. This page will also be updated to reflect the new date, when it is announced. However, any such change in the date will probably be nominal, as only three times since 1970 has the year to year change been more than four days and 25 times the year to year change was two days or less (see chart for 1982 to present or download spreadsheet for 1970 to present, from the Tax Foundation).

Update 3/26/08: The Tax Foundation notified us today that the official 2008 Tax Freedom Day will fall on April 23. However, after reading their entire report, we discovered that in order to keep their year-to-year numbers consistent, for charting purposes, they chose not to consider leap day in their calculations. If you are charting year-to-year changes, this is a necessary adjustment. However, since we do not focus on the year-to-year changes, but rather want our clock to be as accurate as possible, each year, we used the Tax Foundation data, to calculate the exact time that Tax Freedom occurs, including leap day. This year, Tax Freedom will actually occur on April 22 at 5:13 PM. That is the time that we are using for the Tax Freedom Day Clock for 2008.

The Tax Foundation uses the most unbiased method possible for calculating the national Tax Freedom Day. As you can see below, it is very straight forward:

Federal, state & local taxes	x	365 (or 366) days	=	Tax Freedom Day

Total income

In actuality, Tax Freedom Day is different for each state, depending upon the various tax rates that may be in effect in each state, for that tax year. In that case, the formula changes slightly, using only federal, state and local taxes for each state and only the total income for each state.

For our Tax Freedom Day Clock, we use the National Tax Freedom Day.

Individual state Tax Freedom Days for 2008 ranges from March 29 (in low-tax Alaska) to May 8 (in high-tax Connecticut). To learn when Tax Freedom Day falls in your state, visit the Tax Foundation web site.

The important thing to remember is that even in the states with the earliest Tax Freedom Day, at least a quarter of your days at work each year, go to pay your taxes (except Alaska, which comes in as 24.3%). In the worst states, that number rises to more than a third of your work year. Converting that to hours, in an eight hour work day, we all work at least the first two hours just to pay the government. The people in Connecticut work the first two hours and 49 minutes to pay the government.

So the question that you must ask yourself is, "Are the services that you receive from the government worth a quarter to a third of your work days, each year?"

Or, to put it another way, "Are the services that you receive from the government worth a quarter to a third of your working life?"

How many of those lost days at work went to build a "bridge to nowhere" or to provide other pork? How many of those lost days do you think were spent to line the pockets of a bureaucrat or government contractor? Would you have spent any of your hard-earned money on any of those pork projects? Couldn't you provide or purchase many of those government services for yourself, for much less money and have more left over to improve your lifestyle? Are you getting a fair return in services, for all that work, from the government? Think about it...

Tax Freedom Day is exactly what the name implies. It's the day on which the money that you earn actually begins to benefit you and not the government.

We want to thank our friends at the Tax Foundation for their annual efforts to bring us this information. If you have not visited their site, we encourage you to do so. You may be surprised at what you will learn.

Now that you are suitably depressed over how much of your hard work goes to support the government (that is, if you are an American), I will toss you a bone, to make you feel not quite so bad.

If you were in the United Kingdom, Tax Freedom Day wouldn't occur till June 2, 2008, based upon data from the Adam Smith Institute. Of course, if you include government borrowing, the UK's Tax Freedom Day moves further back to June 14, 2008. Either way, for almost half a year, Brits work to support Her Majesty's Government.

Although that doesn't forgive our own government, for forcing us to work so long for them each year, it does give us reason to be glad that we don't live in Europe. On the other hand, maybe that isn't something to be glad about, after all. That's because it appears to be an omen of where we are headed, if we don't start holding our own free-spending congressmen to account on taxes and spending.

Note: The Tax Freedom Day Clock uses JavaScript to effect the countdown, so your browser must support JavaScript and Javascript support must be turned on. If you don't see the days to Tax Freedom above, it's probably because either you, someone else who uses your computer or a piece of software has disabled Javascript in your browser or although it's very unlikely, you may be using a very old browser that does not support JavaScript. Although Action America is designed to be easily used and navigated without JavaScript functionality, several features such as this one will not show up, if JavaScript is not enabled.

See related articles and supporting documents:

1986-2005 IRS Collections Data by Income Category
The Privacy Factor
More Attacks on the Wealthy
US Taxpatriates List
2000 Statistical Yearbook of the Immigration & Naturalization Service (6.2mb PDF)
2003 World Wealth Report (Merrill Lynch/Ernst & Young)
American Citizens Residing Abroad (US Bureau of Consular Affairs)
Health Insurance Portability & Accountability Act of 1996 (26 USC 877(a)(1))
Immigration and Nationality Act of 1996 (8 USC 1182(a)(10)(E))
The Economic Impact of Replacing Federal Income Taxes
with a Sales Tax (CATO)
Fair Tax Act of 2007 (H.R. 25)
Americans for Fair Taxation
National Retail Sales Tax Alliance