Happy National Tax Freedom Day!
According to the Tax Foundation, Americans have to spend 102 days at work in order to earn enough to pay their annual federal, state and local taxes. And here's another shocker: The Tax Foundation also estimated that in 2011, Americans would spend more on taxes than they spend on groceries, clothes and housing… combined.
The Tax Foundation describes itself as a nonpartisan tax research group based in Washington, D.C. Since 1941, it has published "Facts & Figures," an annual report with tax data from 32 different areas, including tax rates on income, sales, property, gasoline, cigarettes, and alcohol. They also break down their statistics state by state, so you can see how large your debt burden may be when taking into account the taxes specific to your home state.
But not everyone agrees with its Tax Freedom Day calculations. The Center on Budget and Policy Priorities (CBPP) has pointed out that the methodology the Tax Foundation uses can lead to flawed conclusions. (Click here to read Tax Foundation Figures Do Not Represent Typical Households' Tax Burdens.)
According to the CBPP, because of our nation's progressive tax system, the Tax Foundation's calculations overestimate what the "average" taxpayer owes in taxes. (By the way, the Tax Foundation openly acknowledges that people who earn very high incomes and, therefore, pay very high taxes skew the "average" results to the upside. But they maintain that their calculations are indeed for the "average" American.)
After all those caveats, do you still want to see where your state falls on the Tax Foundation's list? If the answer is yes, scroll down to see how many days of work the average citizen of your state needs to put in before his or her tax bill is paid off:
Personalized Financial Plans for an Uncertain Market
In today’s uncertain market, investors are looking for answers to help them grow and protect their savings. So we partnered with Vanguard Advisers -- one of the most trusted names in finance -- to offer you a financial plan built to withstand a variety of market and economic conditions. A Vanguard advisor will craft your customized plan and then manage your savings, giving you more confidence to help you meet your goals. Click here to get started.