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The non-partisan Tax Foundation in Washington, DC, just released its annual calculations for its Tax Freedom Day (TFD), and the news is not good.
Tax Freedom Day is the day when US taxpayers have earned enough money to pay their total tax bill for the year. After that day, the money is the taxpayers’ to keep. Taxes at all levels of government are included, whether levied by the federal government or state and local governments.
Tax Freedom Day for US taxpayers this year is April 21, three days later than last year. Taxpayers have three fewer days of their money to keep. According to the foundation, “In 2014, Americans will pay $3.0 trillion in federal taxes and $1.5 trillion in state and local taxes, for a total tax bill of $4.5 trillion, or 30.2 percent of income.” In 1900, Americans paid only 5.9 percent of their income in taxes.
Total tax burdens vary from state to state due to different state and local taxes. Illinois’ total tax burden clearly shows it is a high-tax state. The Illinois Tax Freedom Day is April 28, making it the 7th highest total tax burden in the nation. Connecticut is tied with New Jersey for number 1, the highest total tax burden, and California is number 4.
Illinois’ high tax rates place it at a distinct disadvantage with respect to adjacent states. Of the states surrounding Illinois, every state has a lower tax burden.
Wisconsin is 13th highest, with a Tax Freedom Day of April 22. Iowa is 32nd highest, with a TFD of April 13. Indiana is 24th highest, with a TFD of April 16. Missouri is 36th highest, with a TFD of April 11. Kentucky is 44th, with a TFD of April 8.
“This November, the election for Illinois Governor and members of the Illinois General Assembly will determine whether the state economy thrives or withers away,” said Jim Tobin, President of Taxpayers United of America (TUA). “Taxpayers and small businesses are fleeing to states with lower taxes, such as Texas (32nd highest) and Florida (25th highest). Unless the state personal income tax of 5 percent and the state corporate income tax of 9.5 percent in Illinois are reduced, Illinois will become an economic wasteland.”
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