In the video, below, imagine that the chain gang is operated by government at the federal, state, and local levels and those workers are America's taxpayers.
If the calculations of one D.C. based tax reform advocacy group are correct, our analogy is not as over the top as it might seem. While many Americans are familiar with the concept of Tax Freedom Day as the day each year Americans are no longer working to pay taxes to local, state, and federal government, that calculation only conveys the amount of taxes paid into the system. It doesn't account for government's deficit spending or the added costs imposed by government regulations.
Americans for Tax Reform's Grover Nordquist makes a case in his August 12 Wall Street Journal editorial that most discussions regarding government burdens imposed on Americans, including the recent debt ceiling debate, and the Tax Freedom Day figure, fail to convey the problem fully.
A few important details about Tax Freedom Day...
- Tax Freedom Day, reported by the Tax Foundation, is calculated by dividing the amount of taxes paid into local, state, and federal governments and divided by the nation's total income. That means that the day projected is only a theoretical guideline, although an important one.
- Based on income, state and city of residence, and several other variables, Tax Freedom Day could come earlier or later in the year for individuals. For instance, considering that 51% of Americans pay no federal income tax, Tax Freedom Day may come a heck of lot earlier.
- Note that we've linked to the Tax Foundation's page, which lists a good deal of information about their data, and, notably, a 50 state calendar, with the particular Tax Freedom Day, again, as a whole for the state.
- Nebraskans should take note, when hearing the prevailing wisdom from such elected officials as Governor Dave about our fiscal management as a state, that Nebraska's Tax Freedom Day is later than all of its neighbors, and in fact, is among the latest 15 in the nation. The list of states that have later dates include such bastions as "well managed, fiscally conservative" Massachusetts, California, Illinois, and New York. Shouldn't Nebraska be judged by the company it keeps?
- Lincolnites should be particularly concerned. Not only is Lincoln the highest tax locality in the state, the City Council is preparing to levy a tidy list of increases. Tax Freedom Day in Lincoln? Who knows - after those tax increases go into effect, maybe it'll be something like Memorial Day? Or perhaps Chris Beutler and the City Council are shooting for Halloween?
Details about Nordquist's Cost of Government Day:
- Like Tax Freedom Day, this is an overall calculation and would vary for individuals
- Cost of Government Day includes all taxes collected, government spending including deficit, and calculated costs added by regulations
- Since deficit spending is included in the calculation, one can think of it as a theoretical amount that would go towards paying "as we go" for the shortfall between taxes collected and the annual amount spent.
- Considering that August 12 is Day 224 of 365, in order to pay for all taxes, spending (including deficit spending), and cost of regulations, Americans must work for nearly 2/3 of the year to pay for the cost of government.
Keep in mind that the calculations are based on ONE YEAR of government costs, so the concept of "paying for deficit spending" does not mean payments are being made on EXISTING DEBT.
Need we ask the question...
How we are ever going to pay for the $15+ trillion (guaranteed to be $16 trillion) in debt we already owe if we have to work for 2/3 of a year just to pay for the cost of government for that year?
Whereas we as Americans may have traditionally thought of 5pm as quitting time, it's now really 5pm...sometime in August.
We've finally realized exactly who we're working for, and it's not for ourselves.