Tax Freedom Day: When Do We Stop Paying?
I applaud The Tax Foundation for calculating Tax Freedom Day each year. It’s important that citizens be reminded just how long and hard they have to work (until April 9 this year) to provide for the government’s tax revenues.
But to apply this to a typical nine-to-five workday, it means that you don’t actually start earning for yourself and your family until about 11:15 a.m. each day. Or, if you prefer to step back and look at this over the span of a career, working from age 18 to 65, you wouldn’t finish paying off the government until you were nearly 31 years old.
While this may sound depressing enough, it doesn’t really begin to tell the story.
First of all, the government’s spending goes far beyond its tax revenues with deficit spending this fiscal year alone totaling $1.3 trillion.
Second, the impact of Tax Freedom Day is far greater on those who work in the private sector, since they are the only ones who create new tax dollars. When the public sector—all government and education workers—generates tax revenues, it comes right back to them in salaries, benefits and pensions.
But those public pension promises are largely unfunded (yet guaranteed, nonetheless), which means today’s private sector workers are already on the hook for tomorrow’s public sector pensions—a situation made all the more bitter by the fact that the Social Security system which employees and employers have faithfully contributed to for years is going insolvent.
I’m afraid the calculation of a private-sector Tax Freedom Day compared with a public-sector Tax Freedom Day would start a revolution. And perhaps it should. Until those who work in the Free Enterprise portion of our economy unite and say “Enough is enough” and demand public policy change, the government’s unsustainable deficit spending will continue.