Policy Documents

The Leaflet: Tax Freedom...In Three Days!

April 18, 2014

Tax Freedom...in Three Days!

 It’s that time of year again when everyone is in the spirit of giving ... that’s right, it’s tax season. According to the Tax Foundation, Tax Freedom Day – the day when the nation as a whole has earned enough money to pay the nation’s total tax bill for the year – will be April 21, three days later than it was in 2013.

The foundation also reports tax freedom day for each of the 50 states. While some have already crossed it off their calendars, others have to wait a few more weeks. Louisiana had its tax freedom day on March 30 and Mississippi on April 2, but those living in Connecticut or New Jersey will have to wait until May 9. According to the report, when it comes to each state’s own tax freedom day, “The total tax burden borne by residents of different states varies considerably due to differing state tax policies and because of the progressivity of the federal tax system.”
How much money actually needs to be earned to pay state and federal tax bills? The report says Americans will pay $3 trillion in federal taxes and $1.5 trillion in state taxes in 2014. That $4.5 trillion total is equal to 30.2 percent of all income earned. According to another report by the Tax Foundation, “For the overall government sector from 1930 to 2012, receipts increased from 11.1 to 26.4 percent of gross domestic product, (GDP) and expenditures rose from 12.1 to 35.6 percent of GDP.”
Taxes stunt economic growth by taking dollars out of the hands of income earners, discouraging production, innovation, and risk-taking. Taxes should reflect only the price for government services provided and should be kept as low, flat, and non-distortionary as possible.

Energy & Environment

Many Democrats are proposing carbon tax legislation in their state legislatures and attempting to lure Republican support by promising cuts in corporate or personal income taxes. Policy Analyst Taylor Smith says even with such cuts, carbon tax proposals are actually worse ideas at the state level than they are at the federal level. Read More

Tennessee legislators are considering an education reform that has garnered significant national attention: the Parent Trigger. In this Research & Commentary, Research Fellow Joy Pullmann says adopting the reform would empower parents and increase competition among schools, thus holding educators and school systems directly responsible for their performance. Proponents note parental authority over their children’s education puts power in the hands of the people who care most deeply and only about the children involvedRead More
The current national moratorium on state and local taxation of Internet access is set to expire in 2014, but two proposals being considered in Congress would permanently ban discriminatory taxes on broadband Internet access. Senior Policy Analyst Matthew Glans argues Internet access taxes place an unnecessary burden on consumers, and a permanent moratorium would help broadband access and development expand without increasing the need for government spending. Read More
Budget & Tax
Several legislative proposals in Michigan would increase the state’s minimum wage to as high as $9.50 per hour. Each would reduce the state’s employment rates and economic development. While minimum wage laws attempt to create a minimum standard of living to protect employees’ health and well-being, Senior Policy Analyst Matthew Glans argues that increasing the legal minimum wage actually harms workers by creating barriers to entry for less-skilled and less-educated people. Increasing Michigan’s minimum wage will put more people out of jobs and slow the state’s economy. Read More
Health Care
In an op-ed for the Pittsburgh Tribune-Review, Senior Policy Analyst Matthew Glans describes why adopting “Healthy PA,” a state Medicaid expansion proposal, would be a mistake for Pennsylvania. He writes, “Medicaid expansion is an expensive endeavor that studies show does not provide better or more-affordable health care.” States should focus on reform options rather than expanding a greatly flawed program. Read More
From Our Free-Market Friends
The American Legislative Exchange Council (ALEC) released its annual Rich States, Poor States report this week. The report is an economic competitiveness study authored by economist Dr. Arthur Laffer; Stephen Moore, chief economist at The Heritage Foundation; and Jonathan Williams, director of the Tax and Fiscal Policy Task Force at the American Legislative Exchange Council. It is produced as a forward-looking measure of how each state can expect to perform economically based on 15 policy areas that have proven, over time, to be the best determinants of economic success. Read More

The April issue of School Reform News reports Oklahoma may become the second state to offer education savings accounts (ESAs), currently available only in Arizona. Under House Bill 3398, parents who remove their children from the public school system could receive up to 90 percent of the state funds dedicated to the child’s public education. Funds could be put towards a variety of education services such as private school tuition, charter school tuition, special education assistance, homeschooling, tutoring, counseling, online education, or a combination of these and more.

Environment & Climate News

Budget & Tax News