Tax Freedom Day – the date on which Americans will have worked long enough to pay this year’s tax obligations at the federal, state and local levels – will fall on April 16 for residents of Washington state.
This is the fifth latest Tax Freedom Day to arrive out of all 50 states. The average date for all Americans, as announced recently by the Tax Foundation, was April 12.
“The national date for Tax Freedom Day 2011 is later than last year largely because of income changes rather than statutory tax law changes,” said Tax Foundation staff economist Kail Padgitt. “As the economic recovery continues, individuals’ rising income pushes them into higher tax brackets. Also, corporate tax revenue has also seen a resurgence.”
Although income increases are the main reason for the later Tax Freedom Day, several tax law changes are also partly to blame. The federal estate tax has returned after a one-year repeal, this time at a rate of 35 percent and with an exemption of $5 million. In addition, taxes associated with the Patient Protection and the Affordable Care Act continue to be phased in.
Because of modest incomes and low state and local tax burdens, Mississippi celebrates its Tax Freedom Day first in the nation on March 26th, after only 85 days. Tennessee (March 27), South Carolina (March 29), Louisiana (March 30), and South Dakota (March 30) round out the top five.
High-income states pay much more in federal taxes, and they often have higher state-local taxes as well. Connecticut is the last in the nations to observe Tax Freedom Day, on May 2nd, with 122 days required for state taxpayers to pay the year’s tax total. Other states with late celebrations include New Jersey (April 29), New York (April 24) and Maryland (April 17) .
Click here for more information.