It's Tax Freedom Day! (For Most Workers)
Once most workers in the U.S. have slaved away for 102 days of the year, they've earned enough to pay their federal, state and local taxes. Unless they live in Mississippi or Connecticut which have the lowest and highest tax rates in the union, respectively.
Because of their more humble incomes and low state and local tax burden, Paul L. Curon, who runs the TaxProf Blog, estimates Mississippi's Tax Freedom Day for 2011 fell on March 26. The four other states where Tax Freedom Day arrived earlier in 2011 include Tennessee (March 27), South Carolina (March 29), Louisiana (March 30), and South Dakota (March 30).
Residents of Connecticut will be late to the Tax Freedom Day party, working until the 122nd day of the year on May 2, before earning enough to pay all their taxes. Because Connecticut's income per capita is higher than any other state's, its residents pay more federal income taxes. Nearby states New Jersey (April 29) and New York (April 24) are second and third, respectively. Maryland (April 17) and Washington (April 16) round out the top five.
This year, Tax Freedom Day arrives nearly two weeks earlier than it did in 2007. That's probably because taxes dropped with incomes and the Making Work Pay tax credit was replaced with the 2 percent reduction in the payroll tax.
We may be paying less in taxes than we did several years ago, but they still tend to take an awfully large bite out of most people's salaries. In fact, Americans will pay more in taxes this year than they will spend on shelter, clothing and food combined.
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