Today is Tax Freedom Day. This is the day when Iowans finally have earned enough money to pay off their total tax bill for the year. This includes tax bills at the federal, state, and local levels. In 2013, Iowa taxpayers worked until April 9th (17th earliest nationally) to pay their total tax bill.
According to the Tax Foundation:
- Individual income taxes represent the largest component of Americans’ tax bills. All but seven states levy a state income tax on top of the federal income tax. Paying these taxes together takes Americans about 40 days of work.
- Americans will work 25 days to pay their payroll, or social insurance, taxes—those taxes dedicated to funding social insurance programs such as Social Security and Medicare.
- Americans will spend 14 days working to pay sales and excise taxes, 12 days to pay property taxes, and 7 days for other miscellaneous taxes (such as car taxes, severance taxes, and estate taxes).
- Americans will work 9 days to pay their share of corporate income taxes. This figure peaked, along with corporate profits, in 2006 at 14 days, and dropped in half by 2009 to 7 days. All taxes on businesses are ultimately passed on to individuals in the form of higher prices, lower wages or employment levels, or lower share value.
- Americans will spend more in taxes in 2013 than they will on food, clothing, and housing combined.
House Republicans are working, and will continue to work, to decrease Iowan’s tax burden. This year House Republicans passed House File 478, which would decrease income taxes on half a million Iowans.
To see the Tax Foundation’s full report, click here.