Tax Freedom Day will fall on April 26 this year, according to the Tax Foundation's annual calculation using the latest government data on income and taxes.

Tax Freedom Day marks the calendar date by which Americans have worked enough days to pay off the federal and state taxes they will pay. It is calculated by dividing total tax collections by the nation's income and then converting that percentage into days worked. This year, the percentage fell at 31.6 percent -- meaning that counting from January 1, it would take until April 26 before a worker begins to "take home" their earnings.

The day falls three days later than 2005, according to the Tax Foundation and 10 days later than it did in 2003 and 2004 when slow income growth and tax cuts caused Tax Freedom Day to arrive comparatively early, on April 16. However, 2006's Tax Freedom Day is still considerably earlier than 2000, when the economic boom, the tech bubble and higher tax rates pushed tax burdens to a record high, and Tax Freedom Day was postponed until May 3.

In 2006, Americans will work 77 days to afford their federal taxes and 39 more days to afford state and local taxes.

The full report and state-by-state Freedom Day breakdowns are available at www.taxfoundation.org. This year, the average state-local tax burden will be 10.6 percent of residents' income, with the highest being Maine's 13.5 percent and the lowest being Alaska's 6.6 percent.

Register or login for access to this item and much more

All Accounting Today content is archived after seven days.

Community members receive:
  • All recent and archived articles
  • Conference offers and updates
  • A full menu of enewsletter options
  • Web seminars, white papers, ebooks

Don't have an account? Register for Free Unlimited Access