Tax Freedom Day for PA is April 14

The Tax Foundation has released the latest report on Tax Freedom Day (get the Full Report in PDF).

This year Tax Freedom Day will occur on April 13 for the US, and April 14 for Pennsylvania – meaning it will take every day from January 1 to April 14 for Pennsylvania residents to earn enough income to pay our federal, state, and local taxes.  As economist Josh Barro, author of the report writes, “Americans will pay more in taxes than they will spend on food, clothing, and housing combined.”

This year’s Tax Freedom Day occurs several days earlier than last year; the Tax Foundation highlights two main reasons for this:

  1. The recession – tax collections have declined even faster than household income
  2. The “stimulus” bill, which includes several large, temporary tax cuts for 2009 and 2010.

However, when factoring the federal budget deficit into the equation, the adjusted Tax Freedom day is the latest in US history (see chart to the right).

Pennsylvania ranks as the 11th latest Tax Freedom Day in 2009 (meaning the 11th highest in total taxes as a percentage of income).  Likely, Governor Rendell will use this as a positive, using a selection of New Jersey (2nd highest), New York (3rd highest), and Maryland (5th highest), as the comparison.