In 2013, Floridians would need to work every day from Jan. 1 through April 15 just to pay off their total federal, state, and local tax burden; three more days than last year, but still three short of this year's national average.
The Tax Foundation, a nonpartisan, conservative-leaning think tank headquartered in Washington, D.C., released its annual Tax Freedom Day report Tuesday morning at a webinar for reporters. If all the income earned by Americans beginning Jan. 1 went straight to federal, state, and local governments to pay off the annual tax share, Tax Freedom Day is the day taxpayers would pay off that burden and begin earning money for themselves.
The national Tax Freedom Day this year is April 18, indicating that Americans are working 108 days just over three and a half months just to pay off their taxes; last year's national Tax Freedom Day was April 13. Americans will pay $2.76 trillion in federal income (personal and corporate), payroll, sales, and excise taxes; and $1.45 trillion in state and local income, sales, excise, and property taxes; for a total tax bill of $4.22 trillion.
If annual federal borrowing, which represents future taxes owed $833 billion this year -- is included, Tax Freedom Day would occur 21 days later, on May 9.
William McBride, chief economist for the Tax Foundation, told reporters that the amount of taxes paid by Americans makes up 29.4 percent of the national income, "more money than is spent on food, clothing, and housing combined.
McBride said three factors have contributed to this year's growing tax burden.
"The biggest one is the fiscal cliff deal that raised federal payroll and income taxes. Second, there is the Affordable Care Act [Obamacare] taxes that go into effect this year," he explained. "Finally, despite these increases, the economy is continuing to grow. As incomes grow, people are boosted into higher tax brackets, so their tax rates go up."
A separate 2012 study by the Tax Foundation found that 9.3 percent of the state of Florida's income comes from state and local taxes on residents. That's lower than the U.S. average of 9.9 percent, a fact attributable both to Florida's lack of a personal income tax and the fact that much of the state and local tax burden is shared by nonresident tourists.
The states with the earliest Tax Freedom Days this year are Mississippi (March 29), Louisiana (March 29), and Tennessee (April 2); residents in these states have lower-than-average incomes and so a lower federal income tax burden, and lower-than-average state and local taxes (Tennessee has no state personal income tax). The latest states are Connecticut (May 13), New York (May 6) and New Jersey (May 4); these residents have higher incomes (and so higher federal income tax burdens) and pay higher-than-average state and local taxes.
Reach Eric Giunta at egiunta@sunshinestatenews.com or at (954) 235-9116.
