Limited Taxation
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CLT Update
Tuesday, May 11, 1999

Congratulations activists and supporters:

Beginning tomorrow in Massachusetts you will have finished paying off your tax burden!

Every cent you have earned, starting over four months ago in January, then February, then March, and April into May, has gone to feed federal, state and local government. Starting tomorrow you will finally be free to keep what you can earn in the remaining seven and a half months!

Tax Freedom Day across the United States officially is today ... but Massachusetts taxpayers again must work longer and harder than most -- thirty-seven other states in fact. While the vast majority of U.S. taxpayers can celebrate their liberation today, we must keep working for the government and wait until tomorrow to throw off our shackles and begin retaining the fruits of our labor.

Sorry about that, but we at CLT are still trying our hardest to join the crowd and rollback our tax freedom date!

Chip Ford --

The Boston Herald
Tuesday, May 11, 1999

Feelin' that tax bite
A Boston Herald editorial

Thanks to a booming economy and federal tax increases enacted in the early 1990s, it's taking longer than ever for average Americans to pay off their tax burdens.

According to the nonpartisan Tax Foundation, today is Tax Freedom Day. That's the day Americans on average have accumulated enough to pay their federal, state and local taxes, if every dollar they earned from the first of the year went to that purpose.

In Massachusetts, the day of manumission actually comes tomorrow, due to slightly higher state and local taxes.

As late as 1993, national Tax Freedom Day arrived on April 30. Thereafter, the sizeable tax increases bestowed by George Bush (1990) and Bill Clinton (1993) kicked in, resulting in a steadily increasing burden.

Economic growth is also a factor. As the foundation explains, in an expanding economy, our progressive federal income tax "tends to fill government coffers faster than Americans' pocketbooks."

The typical taxpayer works longer to pay his taxes than to provide food, clothing and shelter for his family -- nearly three hours of the average eight-hour workday.

Politicians have promised relief so often that the public has become cynical about election-year talk of reform. That doesn't mean we're not concerned about the galloping growth of taxes -- concern which could translate into support for legislators who promote viable alternatives to the present system.

Excerpts from
The Tax Foundation's
Economic Growth, Progressive Tax System Combine to Add a Day

"Steady economic growth and a progressive tax system have propelled Tax Freedom Day to another new record this year, May 11," according to J.D. Foster, Ph.D., executive director and chief economist of the Tax Foundation.

Tax Freedom Day, announced by the Tax Foundation each year for over 25 years, is used to illustrate the portion of the American budget that goes to pay for taxes. Once Tax Foundation economists project the nation's effective tax rate, 35.7 percent this year, it is applied to a calendar year to provide a graphic illustration of America's tax bite. In 1999, that means the calculation of "tax freedom" is performed as follows:

Per capita federal, state & local taxes / Per capita income =

$10,298 / $28,878 =

131 days / 365 days =

May 11

Foundation economists Patrick Fleenor and Scott Moody observe in their 1999 Tax Freedom Day report that since 1993 the tax burden has grown markedly, and Tax Freedom Day has tracked this trend by advancing steadily from April 30 into the second week of May. In the relatively short period of six years, Americans are spending an extra 11 days working for government.

Fleenor points out that the steady rise in the proportion of Americans' incomes that goes to pay taxes is primarily attributable to two factors.

"One important reason for America's later Tax Freedom Day is the federal tax increases that were enacted during the early 1990s," said Fleenor, "and the second is the continued economic expansion which, because of the structure of the current tax system, tends to fill government coffers faster than Americans' pocketbooks."...

Individual income taxes are the largest component of Americans' tax bills, and in 1999, Americans on average will have to work 49 days to pay them. It will take 37 days to earn enough for payroll taxes, which fund social insurance programs such as Social Security and Medicare.

The prices of nearly all goods and services are raised by sales and excise taxes, and on average, Americans will work 17 days to pay these types of taxes. Another 11 days will be spent working to pay property taxes, which are primarily levied by state and local governments. Americans will then have to work an additional 12 days to pay their share of corporate income taxes. While largely unnoticed, corporate income taxes are ultimately paid by consumers, employees, and shareholders. Finally, Americans will spend another five days working to pay other business and miscellaneous taxes....

An alternative measure of the tax burden facing Americans is the Tax Bite in the Eight-Hour Day. Similar to Tax Freedom Day but applied to the 8-hour workday instead of the calendar, It measures the amount of time that must be spent working to pay federal, state, and local taxes....

[O]n average, Americans will spend 2 hours and 51 minutes of each eight-hour day working to pay taxes. Most of this time, 1 hour and 57 minutes, will be spent working to pay federal taxes. The remainder, 54 minutes, will be spent working to pay state and local taxes.

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