Tax Freedom Day is a myth

Tax Freedom Day is once again upon us, and every year I cringe. I cringe because this well-known, long-standing and much publicized “holiday” may be reasonably accurate for what it is, but it paints a simplistic picture that doesn’t reflect the true costs of government. Instead of infoming the public, it serves to keep them “dumbed-down” by reinforcing the myth that taxes alone represent their total personal cost of government. They tend to accept that the folks at the Tax Foundation have thought of everything when calculating Tax Freedom Day

So Tax Freedom Day for the nation this year was April 23. Your state may be different. What does it mean? It means that nationally, 30.8% of income goes to pay taxes.

You know what a lot of people say to that? So what!?

Many consider it a small price to pay for everything we expect government to do. These are often the same people that think prices always go up because prices always go up. Besides, going by previous Tax Freedom Days, we’ve been paying close to that percentage for 50 years. What’s the big deal.

When you add other things into the equation it’s not so pretty. There are a lot of costs unaccounted for in the Tax Freedom Day calculations. One example is the cost of tax-compliance, or how much we spend just in the process of paying our taxes.

The IRS estimates Americans spend 6.6 billion hours per year filling out tax forms—including 1.6 billion hours on the 1040 form alone. In 2002 Americans spent roughly $194 billion dollars on tax compliance. That amounts to 20 cents of compliance cost for every dollar collected by the tax system. — Tax Foundation

That cost alone would add 6.16% onto your burden, bringing it up to about 37% and making May 15 Tax Freedom Day. I could go on, but I won’t.

All I want to know is, how much is too much.

Phil