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Tax Freedom Day: You’ve been working for Big Gov to THIS point

Many holidays celebrate a great achievement, the life of a great man, or historical events that have special significance. This month, Americans will celebrate a day with a somewhat different significance — a mere temporary respite from persecution and theft. Get ready for Tax Freedom Day.

Falling on April 24 this year, Tax Freedom Day rather perversely celebrates the part of each year where the government generously allows us to keep our own money. It is the dividing line between that portion of the year where we work for the government, and that portion where we work for ourselves.

This can be confusing, so let me back up a minute. On average, taxation consumes about a third of all the income Americans generate in a year. This includes not only the federal income tax, but state and local taxes, payroll taxes, and excise taxes as well. Some people pay more, and others pay less, but on average, a third is a pretty good approximation.

This means that about a third of the work you do generates income that you don’t get to keep, but instead must pay in taxes. In other words, you work four months out of the year just to pay your tax bill. After that, you can devote the other eight months to making money for yourself.

The actual date of Tax Freedom Day changes each year; it is calculated by dividing total tax revenue by the total national income, and applying this ratio to the days of the year. Not surprisingly, the day has tended to creep forward over the years as the government consumes a larger and larger fraction of its citizens’ earnings.

In 2010, Tax Freedom Day fell on April 9, meaning that in the past seven years, the government has appropriated an additional two weeks out of your year for its own ends. And no one imagines that this is enough to satisfy the voracious beast. How long before the day creeps forward into May, or even June, when we will be forced to sacrifice half the fruits of our labors to the whims of politicians?

Despite President Trump’s campaign promises, he appears to be backing away from his original plan to lower tax rates for most Americans. Unfortunately, the specter of revenue neutrality continues to undermine efforts to meaningfully reform the tax code.

In order for tax reform to be revenue neutral, barring a massive increase in the average income, it merely becomes a matter of shifting the burden from some people onto others. The overall average tax rate will not change, and therefore Tax Freedom Day will remain at its depressingly late date.

Republicans who campaigned on promises of lower taxes should not be duped by calls for revenue neutrality. It’s true that the national debt is a serious problem, and adding to it further would be unwise. But the solution is not more tax revenue — it’s less spending. A government with the courage to reform entitlements and live within its means wouldn’t need to seize a third of the population’s income to sustain itself.

In Ayn Rand’s monumental literary shrine to independence, the protagonists are asked to swear the following oath, signifying self-sufficiency, freedom, and disdain for looters and thieves: “I swear by my life and my love of it that I will never live for the sake of another man, nor ask another man to live for mine.” Yet, in our country, the land of the free, the government demands that we live, or at least work, for its sake four months out of every year.

On this Tax Freedom Day, remember that taxation is really theft under another name, and that we are not truly free as long as we are compelled to surrender what we have rightfully earned.

One last thing…
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