Americans working almost 99 days to pay taxes

Tax Freedom Day® will arrive on April 9 this year, the 99th day of 2010. That means Americans will work well over three months of the year, from January 1 to April 9, before they have earned enough money to pay this year’s tax obligations at the federal, state and local levels.

Tax Freedom Day arrives a day later in 2010 than it did in 2009, but more than two weeks earlier than in 2007. This shift toward a lower tax burden since 2007 has been driven by three factors:

• The recession has reduced tax collections even faster than it has reduced income;
• President Obama and the Congress have enacted large but temporary income tax cuts for 2009 and 2010, just as President Bush did in 2008; and
• Two significant taxes were repealed for 2010 as part of previous legislation, the estate tax and the so-called PEP and Pease provisions of the income tax.

Despite all these tax reductions, Americans will pay more taxes in 2010 than they will spend on food, clothing and shelter combined.

Tax Freedom Day is April 5 for Texans, who have a lower tax burden than the average American. We in Texas get to take home four more days of our pay than other Amercians.