TAX DAYS: It probably won’t be long before the deadline for
filing our federal taxes coincides with the so-called “tax freedom
day” — the day on which Americans will be “free” to earn money for
themselves rather than the government.

Today, of course, is that onerous deadline for filing federal
taxes. But this year’s “tax freedom” day arrived on April 9, the
99th day of 2010. What that means is Americans have worked well
over three months — from Jan. 1 to April 9 — to have earned enough
to pay their federal, state and local taxes.

Bad and good news: This day came one day later than in 2009 but
a solid two weeks earlier than in 2007.

The shift toward a lower tax burden since 2007 has been driven
by three factors: (1) The recession has reduced tax collections
even faster than it has reduced income; (2) President Obama and the
Congress have enacted large but temporary income tax cuts for 2009
and 2010; and (3) Two significant taxes were repealed for 2010 as
part of previous legislation, the estate tax and the so-called PEP
and Pease provisions of the income tax.

Despite all these tax reductions, Americans will pay more taxes
in 2010 than they will spend on food, clothing and shelter
combined.

Tax Freedom Day does not count the deficit even though deficits
must eventually be financed. Since 1948, when Tax Freedom Day was
first calculated, the difference between what governments are
spending and what they’re collecting has never been as great as
during 2009 and 2010.

If Americans were required to pay for all government spending
this year, including the $1.3 trillion federal budget deficit, they
would be working until May 17 before they had earned enough to pay
their taxes — an additional 38 days of work.

This May 17 date for a deficit-inclusive measure is the second
latest since World War II. Only in 2009 was it later, when an
unprecedented budget deficit of close to $1.5 trillion produced a
deficit-inclusive date of May 21, fully 43 days later than Tax
Freedom Day.

By the way, each state has its own Tax Freedom Day.
Pennsylvania’s is on April 13, some 103 days into the calendar
year. That was 11th highest in the country. Not too good but better
than New York which was third at 113 days.